LA Judge - P2P Services Legal!

By Robert Menta 4/26/03

A dramatic victory was handed to the file trade community Friday when a federal judge ruled that two P2P companies were not liable for the content exchanged on their services.

In a stunning setback for the entertainment industry, U.S. District Court Judge Stephen Wilson ruled that Napster spawn Grokster and Morpheus (StreamCast) were not subject to contributory copyright liability, citing the 1984 Supreme Court ruling in the Sony VHS case as the basis for his decision.


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"Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends," wrote Wilson in his opinion. "Grokster and StreamCast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights."

This latest decision is in accord with a Dutch ruling last year regarding another prominent P2P file trade service. In that case, a Dutch court ruled that KaZaa was also not liable for contributory liability. The entertainment industry tried to include KaZaa in last week's trial, but the company fought successfully to stay out.

"It's a vindication. We are not pirates," the president of Grokster, Wayne Rosso, told the Associated Press. "This is teaching the record companies and the movie companies a lesson. ... They need to rethink their business model."

Rosso's point may have hit it on the head. The entertainment industry has spent all of their time litigating rather than innovating and this ruling, should it stand appeal, will probably cause a spate of new services to appear. This is especially true since a profitable business model already exists, as evidenced by KaZaa.

Now that these services have been vindicated in court, the issue of copyright infringement is placed squarely on the shoulders of the people who trade files online. While no court has actually ruled that individual file swapping of music and movie files is criminal (mainly because all of those charged plead guilty before the trial as an acceptance of the lesser of two evils -- the worst being caught up in years of expensive litigation), many feel this is a forgone conclusion.

Of course, many felt that a ruling against Grokster and Streamcast was also a forgone conclusion. That is why the dismissal of the entertainment industry's claims is such a shocker. "We were surprised and disappointed by the ruling overall," stated Motion Picture Association of America President Jack Valenti. "We strongly believe that those who encourage, facilitate and profit from piracy are breaking the law and should be held accountable."

"We were surprised and disappointed by the ruling overall," said the president of the Motion Picture Association of America, Jack Valenti, in a statement. "We strongly believe that those who encourage, facilitate and profit from piracy are breaking the law and should be held accountable."

The entertainment conglomerates plan to appeal the ruling. In the meantime, they will probably turn up their efforts to prosecute, both in criminal and civil court, individuals who trade files on the Net. This includes a file trader whose identity the RIAA is trying to force Verizon (the person's ISP) to reveal. It also includes several college students being sued for running file-swap services on their campuses who may benefit from Friday's ruling.

The entertainment conglomerates said they will appeal the ruling. In the meantime they will probably turn up their efforts to prosecute in criminal court and sue in civil court individuals who trade files on the Net. This includes a file trader whose identity the RIAA is trying to force Verizon to reveal. It also includes several college students the industry sued for running file-swap services on their campuses.

The latter group may benefit from Friday's ruling.

 

Other MP3 stories:
The Music Piracy Myth
PROOF That File Trading Sells DVDs...Sort Of
Arista looks to Copy-protect all CDs.

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