File Sharing Case Turns Against StreamCast

By Richard Menta 7/18/06

"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." That statement came from U.S. District Judge Stephen V. Wilson who three years ago ruled that those applications were not liable for the content exchanged on their services. Now the same judge says the case favors the entertainment firms who took this case all the way to the Supreme Court and won.

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The Supreme Court unanimously ruled in MGM v Grokster that the file sharing services could be held liable if they "actively induced" copyright infringement. The Supreme Court then sent it back to Judge Wilson's lower court to define what active inducement actually means and then apply it. Grokster settled its case for $50 million, but StreamCast, unable to come to terms with Hollywood, continued the fight.

Back in Judge Wilson's court the entertainment industry has filed for a motion for summary judgment in the case. According to the Associated Press the judge made a statement during the hearing saying "In the court's view, the evidence is overwhelming in favor of the moving parties". His use of the word overwhelming ensured there was no ambiguity here. The judge then gave both sides until July 25th to submit briefs on unresolved issues before he decides if he will send the case to a jury trial or make a ruling himself from the evidence already presented.

Negotiations continue between the two parties and the judge's comments certainly push StreamCast to make a settlement. To date, though, none of the services that have come to agreement with the entertainment industry as part of the aftermath of MGM v Grockster have been able to mount a viable legal service.

There is a question that lingers. Will new commercial file sharing applications appear that are designed to intentionally pass the active inducement test created by the court? Maybe, but if BitTorrent's deal with Hollywood proves fruitful commercial services have more inclination to work with the content holders than without them, especially since Hollywood is considerably more open to Net distribution than it was when the record industry first said it would sue Napster in 1999.

Other MP3 stories:
DRM is Like Paying for Ice
Review: Neuros MPEG4 Video Recorder 2

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