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File swap not infringing { April 26 2003 } Original Source Link: (May no longer be active)
http://www.washingtonpost.com/wp-dyn/articles/A39322-2003Apr25.htmlhttp://www.washingtonpost.com/wp-dyn/articles/A39322-2003Apr25.html
File-Swap Sites Not Infringing, Judge Says
Firms Held Blameless For Copyright Violations
By Frank Ahrens
Washington Post Staff Writer
Saturday, April 26, 2003; Page E01
A federal judge in California ruled yesterday that the Internet's most popular music-swapping services are not responsible for copyright infringements by users. It is a potential victory for the millions of people who share songs over the Internet, and a blow to record companies trying to shut down systems that enable what they consider to be theft.
The surprise decision -- which likened music-sharing services to companies that sell VCRs -- was counter to a series of victories for the recording industry in recent years, specifically the 2001 lawsuits that led to the closing of Napster, the seminal and dominant Internet song-sharing service of the 1990s. Since the end of Napster, it was generally thought that the legal tide had turned against free song-swapping on grounds of copyright infringement. Performers are not paid royalties and record companies don't make money on songs traded free on the Internet.
The Recording Industry Association of America, which represents the music industry, and the Motion Picture Association of America -- which is attempting to stanch the free sharing of movies on the Internet -- sued StreamCast Networks Inc. and Grokster file-sharing services in 2001, asking the court to order them closed. StreamCast is the parent of the Morpheus song-sharing service.
U.S. District Judge Stephen V. Wilson's decision yesterday "is significant in part because it breaks the wave of copyright holders prevailing in their claims on new mass-media types of infringement," said Megan E. Gray, a Washington lawyer who specializes in intellectual property. "Upon scrutiny, the [plaintiffs'] case breaks down in several places and they cannot prevail."
The record industry has blamed its current recession on what it calls Internet music piracy. CD shipments fell 9 percent in 2002 compared with 2001, while online CD sales have dropped about 20 percent in the past year, according to Comscore Networks, which tracks Internet use.
Music companies have moved aggressively in the courts to target illegal song-swappers. Earlier this month, the music industry sued four college students that it alleged were running illegal song-swapping Web sites.
Grokster and Morpheus argued that song trading is only one use for their file-sharing systems, which also host legal activities. Suits designed to protect copyright were instead harming useful and important technology, the defendants argued.
In yesterday's decision, Wilson invoked the landmark 1984 Sony Betamax case, ruling that the defendants are "not significantly different" from companies that sell VCRs and photocopiers. In essence, he ruled that product makers are not responsible for what consumers do with the products.
"When users search for and initiate transfers of files using the Grokster client, they do so without any information being transmitted to or through any computers owned or controlled by Grokster," Wilson wrote. "Neither Grokster nor StreamCast provides the site and facilities" for direct copyright infringement.
Morpheus and Grokster differ from Napster in that Napster used a centralized server and song-index system, which meant it could be held directly accountable for the actions of its users. Since Napster's demise, file-sharing systems such as Morpheus have moved to decentralized servers, which removes their liability, the judge ruled. If Napster was a song warehouse, Morpheus is a bloodhound: Users ask for songs, and Morpheus shows where those songs are stored on other users' computers.
Morpheus averages about 10 million users per month, Comscore reported.
The music and movie industries said they would appeal yesterday's decision to the U.S. 9th Circuit Court of Appeals.
"Businesses that intentionally facilitate massive piracy should not be able to evade responsibility for their actions," said RIAA chief executive Hilary Rosen. "We disagree with the district court's decision that these services are not liable for the massive illegal piracy that their systems encourage."
The plaintiffs said the decision reaffirmed that sharing and copying copyrighted material is illegal. Further, Morpheus and Grokster quite likely know that their systems enable copyright infringement and use it to lure advertising to their sites, the judge said. Those facts will support overturning the decision on appeal, said David Kendall, lawyer for the MPAA.
"When a user sits down to use Grokster or Morpheus, he or she has the very same experience as Napster," Kendall said. "That facilitation of piracy makes them liable. The distinction between central indexing and outsourcing one level away we don't believe -- and the judge disagreed with us -- we don't believe is legally significant enough to allow them to escape liability."
Gray and Stanford University law professor Lawrence Lessig said the ruling probably will hold up. Further, Lessig pointed out, Wilson's ruling put the ball back in the hands of lawmakers, which Lessig applauded.
"When technology changes the way content is distributed, it is up to Congress and not the courts" to make the laws, Lessig said.
"Hollywood sought to control what innovators can make available to consumers," said Cindy Cohn, legal director for the Electronic Frontier Foundation, which represents Morpheus. "This ruling makes clear that technology companies can provide general purpose tools without fear of copyright liability."
© 2003 The Washington Post Company
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