Court blow for Napster

Lars Ulrich delivering a list of Napster users last week

Internet company Napster can be held liable for damages sought by the US record industry in a legal battle over MP3 recordings, a judge has ruled.

The company, whose site allows users to search other users' PCs for MP3 files to download via the internet, is being sued by the Recording Industry Association of America (RIAA) for copyright infringement.

It claims Napster is encouraging users of the company's software to trade copyrighted music without permission.

Napster allows users to search other people's hard drives for MP3 files

In San Francisco, Judge Marilyn Hall Patel ruled Napster is not entitled to protection under the Digital Millennium Copyright Act, because the company "does not transmit, route, or provide connections for allegedly infringing material through its system".

The law was created to protect internet service providers from the illegal actions of their users.

'Widescale piracy'

The RIAA's president, Hilary Rosen, welcomed the ruling, saying: "This hearing was Napster's attempt to escape responsibility for aiding and abetting widescale piracy and, not surprisingly, they lost."

Napster lawyer Laurence Pulgram said the ruling would "move the case ahead" and the court still needed to determine if Napster users were breaking the law if they made copies of songs for their own personal use.

MP3.com shares rose after news of its deal

Heavy metal band Metallica and rap artist Dr Dre are also suing Napster. Last week Metallica hand-delivered to Napster 60,000 pages containing the screen names of the people they want removed from Napster's service.

"If they want to steal Metallica's music, instead of hiding behind their computers, they should go down to Tower Records and grab them off the shelves," said drummer Lars Ulrich.

MP3.com deal

Meanwhile, shares in another music site, MP3.com, leapt by 34% on the Nasdaq exchange in New York on Monday after it signed a licensing deal with music rights organisation Broadcast Music Inc.

It allows MP3.com to play music from more than 140,000 songwriters and composers and 60,000 publishers.

Last month, a New York judge ruled it was violating copyrights by allowing users to store their own CDs on the site so they could listen to them on any other PC - a service it called my.mp3.com.