If you can afford to have a computer, you can afford to pay $16 for my ... CD

Eminem

The ruling did not explicitly order the highly popular internet site to close down, but record companies see the verdict as a victory.

"This decision pretty much writes Napster's epitaph," said Chuck Cooper, a lawyer for the Recording Industry Association of America. "Its days as an instrument of shoplifting are over."

Napster has said that it will appeal against the ruling.

"We're fighting for this principle and we believe that the actions that the users are engaged in is not copyright infringement," said Napster chief executive Hank Barry.

Liable

The 9th US Circuit Court of Appeals found that Napster "knowingly encourages and assists its users to infringe the record companies' copyrights".

The ruling requires Napster to prevent its users from gaining access to copyrighted content through its list of songs which are available for users to download from one computer to another via the internet.

We will find a way to keep this community going

Shawn Fanning founder of Napster

"Napster may be held liable for contributory copyright infringement only to the extent that Napster knows of specific infringing files with copyrighted musical compositions or sound recordings," the court said in a summary.

It added that Napster would also be liable if it failed to act to prevent the distribution of copyrighted materials.

Napster fights back

In a press conference after the ruling, Napster's attorney Robert Boies said the decision to close down the service would depend upon the scope of the District Court's modified injunction.

The court of appeals found that the injunction is not only warranted but required

Hilary Rosen RIAA

He added it could take days or weeks for the injunction to be modified.

At the same press conference, Shawn Fanning, the founder of Napster, said: "We will find a way to keep this community going. If we work together, we will find a way."

The decision comes amid a copyright infringement case between Napster and the record companies.

The injunction only governs the operation of Napster's service during the court case, but the court's decision will be seen as an indicator of the case's final outcome.

Copyright court case

The Recording Industry Association of America, the trade group representing record labels, argues that Napster illegally connects users bent on giving away copyrighted material without permission.

On Monday after the ruling, Hilary Rosen, president of the RIAA, said, "The court of appeals found that the injunction is not only warranted but required, and it ruled in our favour on every legal issue presented."

Many musicians were pleased with the ruling.

"We are delighted that the court has upheld the rights of all artists to protect and control their creative efforts," said the heavy metal band Metallica, who were the first group to demand their songs be removed from Napster.

Controversial rapper Eminem is another opponent of Napster.

"If I'm putting my heart and all my time into my music, I expect to get rewarded for that. And if you can afford to have a computer, you can afford to pay $16 for my ... CD," he has said.

But other musicians have backed Napster, welcoming the opportunity to reach new audiences.

"I think the day of the lazy artist is over with," said rapper Chuck D.

"I think it's back to earning the respect of the fans one by one."

Even if Napster is forced to closed, a number of other file-swapping programmes exist, including Napigator and Gnutella.

Although more complicated to use than Napster, they perform the same function of allowing people to exchange music and other files with each other over the internet.