MP3 players could become even more popular in Canada thanks to newer, lower price tags made possible by a recent court ruling.

The drop in price could be possible after the Federal Court of Appeal's decision which says special copyright levies on digital music players aren't legal.

Canada's Copyright Act gives the federal board the authority to apply levies on blank media such as compact discs and audio cassettes.

But the wording of the act has not kept up with new technology such as MP3 players, which use an embedded memory rather than discs or cassettes, to store digital copies of songs.

The Globe and Mail says that this year alone, MP3 sales are expected to generate $5 million of the $25 to $30 million in levies collected for musicians. The levies range from as little as $2 to $25 per device.

The biggest charge is paid by consumers of the wildly popular iPod MP3 player which is made by Apple Computers.

In Canada, the $400 price tag for an iPod includes a $25 copyright levy.

And now, advocates for Canadian musicians are worried the money will stop coming in.

Paul Audley, a consultant to the Canadian Private Copying Collective, said the levies that had been collected, won't be any more.

"It's a significant setback to getting remuneration for private copying," he said.

Audley's group is a non-profit agency that collects and distributes private copying royalties to musicians, songwriters and record companies.

The court case highlights the incredible popularity of iPods. Recent retail figures from the United States show Apple ruling the field, riding high with a gizmo that's fashion chic and a cultural icon.

The company sold two million units in its latest quarter ended in September and has moved a total of more than 5.7 million. Brisk back-to-school sales pushed Apple's share of the hard-disk player market in the United States to 92 per cent in August, according to NPD Group.

The Copyright Board of Canada had been seeking to protect music writers and performers from the "harm" caused by digital copying of music when it imposed the MP3 levies last December.

Mr. Justice Marc Noël said the Copyright Act just does not cover the hot new technology.

"As desirable as bringing such devices within the ambit of [the Act] might seem, the authority for doing so still has to be found in the Act," Judge Noël said in his decision.

Mr. Audley said the collective is considering whether to appeal the court's decision to the Supreme Court of Canada, potentially paving the way for a prolonged legal battle over the rights of musicians in a digital age.

"It is abundantly clear that this is not the last word on the issues," Michael Geist, a University of Ottawa professor who specializes in technology law, told The Globe and Mail.