Napster Loses Key Ruling in Court Case

Updated from 7:57 p.m. EDT.

Napster, which allows people to swap music over the Internet, on Wednesday lost a major battle in its war with the recording industry when a federal judge issued an order temporarily shutting down the service.

Judge Marilyn Hall Patel in San Francisco said the evidence indicated that Napster users download copyrighted material. "When the infringing is of such a wholesale magnitude, the plaintiffs are entitled to enforce their copyrights," she said, according to Reuters.

The suit was brought by the Recording Industry Association of America, which charged that Napster violates copyright laws by letting people download music without paying. The music industry is worried that free downloads ultimately will eat into compact disc sales, damaging recording companies.

Napster plans to immediately appeal the decision.

Napster has argued that "noncommercial sharing of music is common, legal and accepted." It also has contended that rising CD sales show that its service doesn't cut into the recording industry's business.

In the midst of the battle, Napster's popularity has continued to soar. Earlier this month, the privately held company said that its "file-sharing community" exceeded 20 million people.

The ruling has been closely watched, not only because it affects so many Internet users but also because it could affect other sites that offer downloadable music, such as MP3.com (MPPP Quote). MP3.com, which has had its own battles with the recording industry, recently began offering itself as a potential music industry partner.