On 12 February, the US Appeals Court in San Francisco upheld a preliminary injunction against Napster, rejecting Napster's defence that its users were engaged in fair use of copyrighted material.

Napster had immediately appealed the preliminary injunction granted in July last year, thus gaining a temporary reprieve pending the hearing of the appeal, but an amended version of the preliminary injunction has now been implemented.Napster designed and operated a system known as 'peer to peer file sharing' by which PC users can transmit and retain sound recordings using digital technology.

Thus, users can not only make music files stored on their computer hard drives available for copying by other users, but they can search for music files stored on other user's computers and make exact copies of such files.The US appeal court agreed that the Recording Industry Association of America had presented a good case of direct copyright infringement by Napster users and also upheld the district court's decision that Napster itself was liable in both contributory and vicarious copyright infringement.

Effectively, it was held that Napster actively encouraged and assisted its users to infringe copyright and that Napster had a direct financial interest in such infringing activity and that it was able to, but did not, police its system to prevent infringing activity.However, the Appeal Court did narrow the preliminary court's decision by holding that Napster may only be held liable for contributory copyright infringement to the extent that it knew of specific infringing files, knew or should have known that such files were available on its system, and failed to prevent the distribution of such material.

Moreover, Napster would be liable for vicarious copyright infringement to the extent that it failed properly to police its system and prevent access to potentially infringing files listed in its search index.The extent to which this would be followed in England and Wales is unclear as the concepts of contributory and vicarious copyright infringement is unknown in English law.

However, there is no doubt that someone who authorises another to commit an infringing act is liable in the same way as the person who commits the infringing act itself.Interestingly, two days after the Napster decision in the US appeals court, the European Parliament tackled the same problem -- attempting to strike a balance between the interests of the media and entertainment industry and those of the consumer.

On the one hand, creativity and innovation should not be stifled by the inadequate protection of intellectual property.

But, on the other, the rights of consumers, network operators and educational instructions must be safeguarded.The European Parliament voted in favour of a series of amendments to the Copyright & Related Rights Directive to address the problems created by Napster and similar file-sharing services.

This has come nearly two years after similar legislation was passed in the US.The music industry lobbied fiercely for a ban on private copying for personal use as the only effective way to outlaw Napster-type Web sites.

The amendments fall short of this by allowing consumers to reproduce material they own but disallowing wide distribution or sale of such copies.

In effect, this would probably allow you to e-mail an MP3 copy of your own Robbie Williams CD to a friend but not to upload it to a service such as Napster, which would allow distribution to his countless other fans.In line with the protection afforded to service providers and telecoms operators by the US Digital Millennium Copyright Act, exemptions were agreed in relation to acts of reproduction which constitute technical copies.

To safeguard the effective operation of the Internet, it was necessary to exempt those who placed copyright material on the Web and those who transmit or carry such material.

However, to qualify for these exemptions there are a number of stringent conditions, including that exempt acts of reproduction must form an essential part of a technological process and occur in the context of a transmission in a network.

If these conditions are not met then, consistent with the liability provisions in the related E-Commerce Directive, the Directive provides that injunctive relief is available against intermediaries -- service providers and the like -- when they are used by third parties to commit infringing acts.Likewise, the interests of the music and film industries were upheld by provisions which support encryption and other anti-copying devices by giving rights holders control over the manufacture and distribution of devices designed to disable them.

But how does this square with the right of reproduction afforded to legitimate copiers such as libraries and educational institutions? While copyright owners have absolute freedom to use anti-copying devices, they will also be obliged to provide those who qualify for an exception -- for example, schools and libraries -- with the means to disable such devices.

Therefore, it seems that while the amendments to the Copyright Directive will not outlaw small-scale consumer copiers, the Directive does encourage the use of technology which does so.Labour MEP Arlene McCarthy was quoted as saying: 'We voted to neither legalise electronic theft nor to criminalise consumers .

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It's about defending rights we take for granted in the UK.

It's about making a copy of Big Brother on Friday to watch on Saturday, and making a copy of your favourite CD for your own use'.The Directive is expected to be implemented in member states within the next 18 months.