MP3 music file sharing company Napster has been successful in its appeal against an injunction that would have forced it to close its Web site.

The injunction has been stayed until a full appeal is heard on 18 August.

Friday's decision follows proceedings on Wednesday, when U.S. District Court Judge Marilyn Hall Patel issued an injunction against Napster ordering the company to halt the use or exchange of MP3 music files though its Web site.

Napster was given until midnight Pacific Time on Friday, 27 July to comply with the order.

Napster's site lets users download MP3-format music files that are stored in the computers of other users.

Through a Webcast on the company's site, Napster founder Shawn Fanning and Hank Barry, chief executive officer, told the company's music community that they intend to use every venue and every court to fight the ruling.

"We will keep fighting for Napster and for your right to share music over the Internet," Fanning said.
The recording industry now has a legal framework within which to go after other peer-to-peer networking companies, said Malcolm Maclachlan, media and electronic-commerce analyst at IDC.

However, because the market opportunity for legal peer-to-peer networking holds great potential, the RIAA can't rest peacefully, Maclachlan added.

"The RIAA will need to [address online distribution] because it has too much momentum. They have an opportunity to build a creative system from the ground up for what is a huge market.

Napster and other peer-to-peer things can be a very good marketing tool. This is information that people pay millions of dollars for," Maclachlan said.

As part of a settlement of some sort, Maclachlan said, "I hope the recording industry is creative enough to turn Napster into something they can use. It has the potential to push the market."