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By Sarah Left, 26 July 2000 00:30

NEWS Online music swapping service Napster will be forced to shut down if a California judge rules against it later today, a move which would give the major record labels a huge boost in their fight to protect their intellectual property rights. The Recording Industry Association of America (RIAA) filed suit against Napster in December, and has asked for a preliminary injunction against the online distributor of MP3 files, with a decision due today. If the RIAA is successful, Napster will be forced to close down until the court case reaches a conclusion. The case pits copyright law against new technology that threatens to undermine it. Analyst house Jupiter Communications said this week that online digital music sales will be worth $5.4bn by 2005. This means record companies will be seeing continuous challenges to their traditional revenue models. Chris Evans, founder of UK lobby group, Internet Freedom, said: "Record companies need to react in much the same way as publishers did to the internet, having to rethink the way they distribute material. They need to look for new models, rather than using old legislation and forcing its application to the internet. That's an inappropriate strategy. It's bad for users, artists and software writers." The RIAA claims Napster is costing US record labels millions in lost sales and record companies have long argued that their investment helps fund music development. But a recent study from Jupiter disputes the claim that Napster is draining the coffers of RIAA members. Analysts found that Napster users are 45 per cent more likely to increase their overall music purchases. Whatever the outcome of the injunction, the fledgling Napster has been funding its legal battle with venture capital, and will find itself with less and less money to fight on through the courts. That could create an opening for rivals to slip through once the legal position of online music distributors has been clarified.