The US appeals court is giving Napster the go-ahead to continue its peer-to-peer music file-sharing service in a dramatic overturning of a recent court order forbidding the company to trade.

Judge Marilyn Hall Patel last week ordered Napster to remain offline until it could guarantee that it is successfully blocking all copyrighted music unauthorized for trading. Napster could only guarantee a 99 per cent rate to the court.

Napster was "pleased" with the appeal court's decision, but stressed that the company continues to move forward with the launch of its new subscription-based membership service later this summer.