The future of Napster may be determined by what is possible to police -- and what is not -- on a maze of global networks used by more than 50 million people. In condemning the online music-trading company for failing to prevent copyright violations, a three-judge panel from the 9th US Circuit Court of Appeals in San Francisco said Monday that Napster must police its own networks "within the limits of the system". The right to define that short phrase looms as one of the most important battles shaping future business models and laws that affect the Internet in general. All along, Napster's attorneys have argued that it is impossible to monitor the service's networks on a scale wide enough to satisfy the plaintiffs, the recording industry's major labels. Even the appeals court appeared to give the company and similar services some room to maneuver in this task, saying: "Here, we recognise that this is not an exact science." "There will always be an underground," said PJ McNealy, a senior Gartner analyst. "Today may be the day Gnutella takes off. And if so, today is the day the record labels scratch Napster off the top of their list and replace it with Gnutella." The case is a classic clash of traditional laws and emerging technologies, reminiscent of efforts to govern content in the early days of the Internet's mainstream popularity. Although the Napster dispute is focused on music, the arguments behind it may affect all copyrighted, digital material that is transmitted through the so-called peer-to-peer networks used to swap files -- especially those working with central servers that can be monitored to some degree. It is not uncommon for a company to argue that court rulings are technologically impossible to fulfill, particularly when the order threatens a fundamental part of its business. Software giant Microsoft, for example, made such arguments in defending the integration of its Web browser with the Windows operating system against antitrust allegations. Perhaps more analogous is the recent content regulation case involving Web portal Yahoo!, which was ordered by a court in France to stop auctioning Nazi paraphernalia within French borders. The company first said it could not filter out items by geographic boundaries but later complied with the order. When a US District Court judge ordered Napster to halt the trading of major-label music in July, the company said it was technologically impossible to comply with the order unless it were to shut down altogether. The judge will review that injunction with some modification, as directed by the appellate court. On Monday, Napster executives and attorneys declined to say specifically how well they can filter songs. Attorney Jonathan Schilling said only that wholesale blocking is impossible without "impeding [legal] activities or crashing computers". Napster has, however, demonstrated its ability to block specific connections that have been used to download copyrighted material in the past, at the behest of artists such as Metallica and Dr Dre. And technologies being developed could make it easier to monitor such content. As noted by the appellate judges' decision, most music on Napster is organized by artist and song title. A system could be imposed to block the trading of songs with specific names -- an easy, if blunt, technology to implement, experts say. "We've already demonstrated such a text-based filtering system," said Travis Hill, president of Media Enforcer, a service that searches Napster and other similar communities for copyrighted files. Several similar services exist, including UK-based NetPD, the company Metallica hired last summer to find individuals who may have been pirating its songs. Hill said it would be relatively simple for people to evade such blocking mechanisms based on song titles or artist names by using code words or simple misspellings. But he noted that the added hassle could make Napster less appealing to use. "The very value of the Napster service to many is inherent in the ease of finding a song," Hill said. "If everything is misspelled, it makes it that much more difficult." A more sophisticated filtering system might be built with the help of "fingerprinting" technology that identifies songs by taking a kind of sonic snapshot of files, using much the same kind of technique that is used to track radio station playlists. Several companies are already offering this type of product and are talking to record companies and peer-to-peer services about using such systems. Software industry executives praised Monday's ruling, saying it highlights Napster's obligations to go after copyright violators. "This will ensure that file sharing on the Internet will continue to thrive, but it has to take into account the reasonable expectations of copyright holders," said Robert Holleyman, chief executive of the Business Software Alliance. Debate not over yet Still, even if Napster eventually is forced to shut down or goes the pay-per-play route, the digital music debate won't end. The record companies have secured a victory in forcing Napster to monitor itself -- but with other networks such as Gnutella or FreeNet, where there is no central company or other entity either to sue or to act as police, that approach fails. That means those underground networks will remain file-trading safe havens, unless the record companies take on the policing role themselves, launching high-profile cases against individual consumers. And that's a dangerous role to play. "You can stop Gnutella, but you would have to go after individuals, scaring people enough that they stop using it," said Travis Kalanick, whose Scour file-swapping service was put out of business by a $250bn lawsuit. "This genie could be put back into the bottle. But the question is whether the record companies want the public relations nightmare it would take." Beyond legal remedies, content companies will likely seek to bolster copyright laws to give them greater control over digital distribution, although such laws would not likely seek to shut down peer-to-peer technology altogether. "I think it's going to be decided initially in the courts, but I think eventually Congress will step in," said Mark Radcliffe, an intellectual property attorney with Gray Cary Ware & Freidenrich. "There's too many interested parties for Congress to leave it alone." Already, lobbyists on all sides have been hard at work inside the Beltway. The record labels have hired former Republican Sen. Bob Dole of Kansas to lobby Congress to strengthen digital copyright laws and enforce restrictions that already exist. Napster signed on a former aide to Sen. Orrin Hatch, R-Utah, as its policy director. So far, federal lawmakers have stopped short of taking any substantial legislative action specifically related to digital music, primarily because cases such as Napster's are still moving through the courts. In the meantime, Napster chief executive Hank Barry said Monday that the company will try to work within the limits of a new injunction without shutting down, if that is possible. "We will do everything we can within the limits of an injunction to continue to provide 51 million members with access to music," Barry said. The Internet is changing the face of the music industry forever. Find out more at the MP3 Newsroom. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Napster Debate. 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