In a brief filed with the U.S. 9th Circuit Court of Appeals, Napster reiterated its position that neither its users – who trade music for free – nor the company that helps them do so are in violation of copyright law. Napster asked the court to reverse and vacate the injunction.

“If users are not themselves infringing, then we are not liable for contributory infringement,” Napster attorney Jonathan Schiller said.

On July 26, U.S. District Judge Marilyn Hall Patel granted the injunction at the request of the Recording Industry Association of America, which sued Napster in December for copyright infringement.

Nine hours before the injunction was to take effect, the U.S. 9th Circuit Court of Appeals issued a stay, allowing the company to stay online, at least temporarily because “substantial questions” had been raised about the merits and form of the injunction.

The RIAA continues to disagree. “Judge Patel issued a thoughtful and well-reasoned opinion that we believe will be upheld on appeal,” spokeswoman Amy Weiss said Friday.

Schiller said Napster would continue to rely on existing federal law, including the Audio Home Recording Act of 1992, as a defense in the case. A section of that act expressly prohibits liability for non-infringing uses of digital recording devices by a consumer.

Patel’s rationale for arriving at her decision July 26 to grant the RIAA’s request for a preliminary injunction against Napster was “unprecedented, unfair and over broad,” Schiller said.

The injunction would have required Napster to substantially redesign its technology within 36 hours, an unprecedented demand, Schiller explained.

Prior to the stay, tens of thousands of outraged Napster users had pledged to boycott the recording industry in retaliation for its lawsuit. One group claimed to have 75,000 signatures of people who vowed not to buy music unless the RIAA dropped the suit.

The RIAA argued to the U.S. District Court that Napster had adversely affected CD sales. Napster presented contrasting studies that showed increased music sales due to Napster use and told the appeals court Friday that Patel looked past such “evidence.”

“The District Court ignored this overwhelming evidence of the positive impact of sampling and answered the wrong question, relying on evidence supposedly showing that downloading generally was displacing the market,” the Napster brief said.

The stay brought a temporary reprieve for Napster and elicited cheers from the Redwood City-based company’s fans in Internet chat rooms. The same ruling drew grumbles from the recording industry, which is trying to stomp out online music piracy while ushering in new technologies for legitimate music sales via the Internet.

“Napster is just jockeying for position and trying to come to a legitimate business agreement with the RIAA to provide legal music downloads,” said intellectual property attorney Leonard Rubin.

“I think that they are attempting to position themselves so that can make a deal with the recording industry,” Rubin said. “I personally think the recording industry would be crazy not to (make a deal with Napster.)”

A deal between Napster and the RIAA could cut costs substantially for record labels and ease music distribution channels, Rubin said. “The record industry would save the cost of reproduction on CDs, distribution all over the country, the jewel box the CD comes in.”

Napster’s CEO Hank Barry confirmed the company has proposed working with the RIAA, but said Friday that the RIAA has rejected all proposals so far.

“I think the best result would be to reach an agreement with the recording industry,” Barry said.

Napster claims to have more than 22 million registered users of its music-sharing software. The RIAA, suing Napster on behalf of its members, has until Sept. 8 to file a response to Napster’s brief.

“This is one of those periods of upheaval that copyright and intellectual property law goes through from time to time,” said Mark Radcliffe, an attorney with Gray, Cary, Ware and Freidenrich who is closely following the case. “The recording industry is not going to solve this problem legally. What they’re doing is slowing down the avalanche.”