*Judges Nap on Napster

A panel of 9th U.S. Circuit Court of Appeals judges on Monday failed to hand down the decision that will set the tone for future disputes over one-to-one digital file sharing.

Napster, Redwood City, CA, produces free, downloadable software that allows its users to chat with one another while swapping digital MP3 music files. The company is appealing a July court decision that ordered it to shut down pending a trial into copyright infringement charges brought by The Recording Industry Association of America.

The RIAA, which represents America’s major record labels, blasts Napster’s

variety of one-to-one file sharing and claims the software facilitates mass theft.

“Nobody expected a ruling from the bench [Monday] but we were pleased with the court’s understanding of the issues,” Hilary Rosen, president and CEO, RIAA said in a prepared statement.

“This case… is about Napster’s abuse of peer-to-peer technology for its own commercial benefit. It is our hope that the Court sends the message that this activity will not be tolerated, so that legitimate businesses who pay creators can enter the Internet market and compete fairly. Legitimate commerce must be able to flourish without having to compete with free,” Rosen said.

Napster officials have reportedly made several offers to individual record labels, but have gotten nowhere with their efforts. CEO Hank Barry reported the company has worked on business models that would charge users $4.95 a month, which could lead to $500 million for record companies in 2001.

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