Napster is not dead yet. On Friday, the Ninth Circuit Court of Appeals in San Francisco ruled in favor of the controversial music-sharing software maker in its appeal of the Wednesday injunction that called for Napster to remove all unauthorized copyrighted material from its site by midnight Friday. The three-judge panel found that "substantial questions" had been raised about "the merits and form of the injunction" called for by the Recording Industry Association of America.

"I am happy and grateful that we do not have to turn away our 20 million users and that we can continue to help artists," said Shawn Fanning, founder of Napster. By helping artists, Fanning was referring to the company's contention that Napster usage boosts record sales (the RIAA claims Napster cuts into sales). Before Friday's ruling, Napster stepped up efforts to prove this to the RIAA by urging users to purchases CDs from Napster-friendly artists like Limp Bizkit, the Offspring and Radiohead. In the statement released on napster.com, CEO Hank Barry continued the company's new commitment to working with the RIAA, saying, "I believe the Napster technology can help everyone involved in music -- including artists, consumers and the industry. New technologies can be a win-win situation if we work together on building new models -- and we at Napster are eager to do so."

A somewhat deflated RIAA issued its own take on Friday's decision. Citing the enormous Napster traffic the Wednesday injunction created, as users tried to sow their final digital oats, RIAA CEO Hilary Rosen said, "It's frustrating, of course, that tens of millions of daily infringements occurring on Napster will be able to continue, at least temporarily. In fact, since the district court issued its order, the illegal downloading of copyrighted music openly encouraged by Napster has probably exceeded all previous records."

Napster is not out of the woods yet, however. The stay of the injunction only lasts until September, to give the Court of Appeals time to better review the case. Meanwhile, the RIAA has the option of filing an appeal with the Ninth Circuit Court of Appeals or with the U.S Supreme Court.

Written by CHRISTINA SARACENO for RollingStone.com News