Audiogalaxy, a popular Internet file-swapping service, agreed Monday to filter copyrighted works as part of a legal settlement with the recording industry.

Under the settlement, Audiogalaxy is required to obtain permission or consent from a songwriter, music publisher and/or recording company to use and share copyrighted works. In addition, Audiogalaxy has agreed to pay the music publishers and recording industry an undetermined amount of money based on Audiogalaxy's assets and interest in resolving the case quickly, according to the RIAA.

The RIAA, along with the National Music Publisher's Association and The Harry Fox Agency, sued Audiogalaxy last month over copyright infringement. The suit was filed in federal court in New York, charging that Audiogalaxy's efforts to filter access to copyrighted songs have been ineffective.

While the settlement clears the way for Audiogalaxy to leave its legal headaches behind, it raises other, equally pressing concerns over the company's future. Audiogalaxy has attracted millions of Web surfers by offering a broad menu of free music--a deal that almost certainly will not survive the settlement.

The tough road to legitimacy for file-swapping companies was illustrated last year by Napster, which added filters aimed at blocking its users from trading unauthorized files, only to shut down voluntarily when they proved insufficient. The company has remained dark ever since. It filed for bankruptcy protection earlier this month, although it still awaits a chance to come back online, according to its primary backer, German media giant Bertelsmann.