Napster Deal Reportedly in the Works

A mediator appointed by the judge in the Napster Inc. case has been negotiating a deal to allow the popular online music-swapping service to survive without violating copyright laws, according to a published report.

An appeals court last Monday upheld a July ruling by U.S. District Judge Marilyn Hall Patel, who found Napster guilty of copyright infringement.

Patel appointed former federal judge Eugene Lynch as a mediator between Napster and major record companies, the article in the Feb. 26 issue of Newsweek magazine said.

Napster declined to comment Sunday, citing legal constraints.

Lynch has already held one negotiating session in an attempt to settle the dispute and has scheduled another meeting, Newsweek said.

Patel said last week she believes a compromise could be reached between the parties.

The Feb. 12 decision by the U.S. 9th Circuit Court of Appeals could lead to the shutdown of Napster, which allows the free swapping of music over the Internet.

Napster may already be coming to a resolution that would keep it afloat.

On Friday, interim Chief Executive Hank Barry announced that Napster and a unit of German media giant Bertelsmann had developed a membership-based model that would allow music files to be transferred from computer to computer.

Napster, developed by 19-year-old college dropout Shawn Fanning, lets fans swap songs free by trading them using MP3, a compression format that turns music on compact discs into small computer files.