MESSAGE
| DATE | 2004-08-21 |
| FROM | Ruben Safir Secretary NYLXS
|
| SUBJECT | Subject: [hangout] Movie Studios Lose In Case Against File-Sharing Apps
|
Movie Studios Lose In Case Against File-Sharing Apps Aug. 20,
2004
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The decision is likely to force the industry to take the more costly
and less-popular route of going directly after file-swappers.
By David Kravets, Associated Press
SAN FRANCISCO (AP) -- In a judicial blow to the entertainment industry,
a federal appeals court ruled that makers of two leading file-sharing
programs aren't legally liable for the songs, movies, and other
copyrighted works their users swap online.
The decision is likely to force the industry to take the more costly
and less popular route of going directly after file-swappers.
Jack Valenti, president of the Motion Picture Association of America
Inc., said his group is reviewing its next step following Thursday's
ruling by the 9th U.S. Circuit Court of Appeals in favor of Grokster
Ltd. and StreamCast Networks Inc.
Mitch Bainwol, chairman of the Recording Industry Association of
America, said the decision begs the question of whether "digital music
will be enjoyed in a fashion that supports the creative process or one
that robs it of its future."
Recording companies already have sued more than 3,400 such users; at
least 600 of the cases were eventually settled for roughly $3,000 each.
Among other reasons, the three-judge panel unanimously upheld a lower
court ruling that dismissed the bulk of the lawsuit brought by movie
studios and music labels because Grokster and StreamCast don't have
central servers pointing users to copyrighted material, as the original
Napster did.
"In the context of this case, the software design is of great import,"
Judge Sidney R. Thomas wrote.
The panel noted that the software firms simply provide software that
lets individual users share information over the Internet, regardless
of whether that information was copyrighted.
"History has shown that time and market forces often provide
equilibrium in balancing interests, whether the new technology be a
player piano, a copier, a tape recorder, a video recorder, a personal
computer, a karaoke machine, or an MP3 player," Thomas wrote. "Thus,
it's prudent for courts to exercise caution before restructuring
liability theories."
Civil libertarians also had warned that a defeat for Grokster and
StreamCast could have forced technology companies such as Microsoft to
delay or kill innovative products that give consumers more control.
The decision came nearly two weeks after attorneys general from 45
states sent letters to seven companies that offer online file-sharing
software, including Grokster and StreamCast, hinting at possible legal
consequences if the networks don't better inform computer users about
potential copyright violations from sharing files.
The attorneys general asked the companies to improve how they inform
those who use their software about potential legal and security risks
associated with file sharing, which include being sued for copyright
infringement, identity theft, and unwittingly being exposed to
pornography, computer viruses, and spyware.
Napster was shut down after the 9th Circuit ruled that its centralized
servers, which contained directories to thousands of copyrighted songs,
made it legally liable for contributing to copyright infringement.
But in the wake of that ruling, peer-to-peer technology developed,
avoiding the need for a central hub and arguably limiting the liability
of the companies involved.
Fred von Lohmann, who represented Los Angeles-based StreamCast, said
the ruling follows "the same principle that people who make crowbars
aren't responsible for the robberies that may be committed with those
crowbars."
Thursday's ruling could influence a separate ongoing entertainment
industry case against Sharman Networks Ltd., makers of the Kazaa
file-swapping program, which averages more users than any other
file-sharing software.
A Sharman attorney, Rod Dorman, said the company now would seek to have
a U.S. court declare Kazaa legal. But he noted Thursday's ruling
wouldn't directly affect the recording industry's lawsuit against
Sharman in Australian courts.
In a different case, the maker of iMesh file-sharing software recently
agreed to pay $4.1 million to the recording industry for copyright
infringement and to change its Internet service later this year to
prevent consumers from illegally distributing music or downloading
songs.
Thursday's ruling makes it less likely another company would settle.
The lower court ruling cited the U.S. Supreme Court's 1984 decision in
the Sony Betamax case. The court said Sony wasn't liable when people
used its Betamax videocassette recorder to copy movies illegally
because the technology had significant uses that didn't violate
copyrights.
The studios and labels argued that while Sony couldn't control how
consumers used their VCRs, Grokster and StreamCast could filter the
copyrighted content from their systems, like they do with computer
viruses, but refuse to do so, because the free songs and movies are
what draw their users and ultimately generate ad profits.
Copyright © 2004 The Associated Press. All rights reserved.
The information contained in the AP News report may not be published,
broadcast, rewritten or redistributed without the prior written
authority of The Associated Press.
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