GENE RANDALL, CNN ANCHOR: The recording industry has suffered a setback in a federal appeals court. It's ruled that Napster can stay in business while the copyright infringement suit against it goes to trial. CNN's Casey Wian has our report.</s>CASEY WIAN, CNN CORRESPONDENT (voice-over): Two days after Napster was given what appeared to be a death sentence, the online music swapping service received new life from the U.S. Court of Appeals. Two judges effectively hit the pause button on the recording industry's effort to shut down Napster. They ruled that Napster raised substantial questions about both the merits and the form of the injunction that would have shut Napster down at midnight Friday.</s>DAVID BOIES, NAPSTER ATTORNEY: Obviously we're very pleased, because what this means is that Napster is going to be able to continue to service its 20 million customers until the Court of Appeals has an opportunity really to look at the merits of the decision.</s>WIAN: Napster had argued that the injunction was too broad, because there was no way it could monitor whether its users were illegally trading copyrighted material. It also complained the injunction took the unprecedented step of requiring changes to a technology that had legitimate legal uses. And Napster claimed the federal judge ignored legal precedents supporting its case. The Recording Industry Association released a statement saying, "It was disappointed by the ruling, but remains confident in its position, which is that Napster facilitates widespread piracy of copyrighted music." It will now have to make that case in court while online music swapping proliferates. (on camera): The appeals court has asked for a briefing from Napster by mid-August and one from the recording industry by mid- September. Barring a settlement of the dispute, a court date will be set after those papers are filed. Casey Wian, CNN Financial News, San Francisco.
Court of Appeals Gives Napster a Reprieve