MGM v. Grokster

[ric]

Here is my question, with recent ruling of legal impications of P2P applications, how hell can third parties be legal responsible for so called illegal pirating of sofware, music, or movies?


http://www.internetnews.com/bus-news/article.php/3516021


This is interesting read

http://www.technologyreview.com/articles/05/07/issue/forward_limewire.asp

LimeWire's Live Wire
By Spencer Reiss July 2005
1 of 1

One of the most closely watched U.S. Supreme Court cases this spring was MGM v. Grokster. In it, the Court heard arguments on whether Grokster and other makers of software used to share music and video files over the Internet should be shut down because of users' illegal copying of copyrighted material. Aerospace engineer turned Wall Street options trader Mark Gorton runs Lime Wire, maker of the popular file-sharing program LimeWire. He spoke to TR late this spring about the pending ruling.



Downloads of LimeWire software are running well over a million copies a week. The legal threat isn't hurting the file-sharing business?
I doubt most of our users even think about it.

The music industry certainly does.
They need to get over it. Look at the history: every time there's a technological innovation, someone says the sky is falling. But it never does. The way the music business makes money today is different from what it will be 10 years from now, but that's not unhealthy.

But don't they say that 90 percent of file-sharing traffic is pirated?
I don't see copyright infringement as a discrete issue. File sharing is a net good for society. It lowers the cost of distributing music. The fact that practically everything that's ever been recorded is now available at everyone's fingertips is amazing. When I tell people I run an options-trading company, their eyes glaze over. When I tell them I do LimeWire, they get excited.

Even if the record companies lose this battle, won't they still go after individual downloaders?
They have the right to file 10 million lawsuits. Whether they have the societal backing to do that is another question. If 20 kids on every campus in America are being sued, will there still be public support for more-stringent copyright law? But it's not just political calculation: these are their customers.

Do you see file sharing extending beyond digital media?
Absolutely. It's perfect for something like job seeking: people can post their own resumes. And it wouldn't surprise me to see an open alternative to eBay.

Couldn't the courts outlaw all this?
Sure, they could put all the current domestic file-sharing software makers out of business. But the software will still be out there. LimeWire is open source. And the user networks will survive.

Under a U.S. Supreme Court ban, presumably things would shift offshore. We've already got sites like allofmp3.com operating from Russia.
Then maybe they'll sue the ISPs that connect up to Russia. But if you start making everyone responsible for everything that goes over the network, it's a very different Internet from the one we have today.

Big media companies don't seem to see it that way.
Right, and they don't have much to lose, so they're giving it a shot. It distracts them from reality, which is that they shut down Napster four years ago, they shut down Aimster, and file sharing is more popular than ever.

You're pretty cocky, given that your business is at risk of being outlawed.
I'm pretty confident the Court will do the right thing. And I have other businesses. As much as I enjoy doing LimeWire, it's not like my life depends on it.

[ric]

Court Orders Kazaa to Stop Pirates

By MIKE CORDER, Associated Press Writer 2 hours, 9 minutes ago

SYDNEY, Australia - A federal judge on Monday ordered distributors of the popular file-swapping program Kazaa to alter the software, which millions have downloaded, so it can no longer be used for music piracy.
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Hailed as a victory by the recording industry that brought the suit, the decision has implications well beyond Australia, where Kazaa executives are based, because Kazaa's users span the globe.

In some ways, it mirrors the
U.S. Supreme Court's June ruling that Hollywood and the music industry can sue technology companies that encourage their customers to steal music and movies over the Internet.

Federal Court Judge Murray Wilcox determined in Monday's ruling that Kazaa's owners and distributors, led by Sharman Networks Ltd., took no action to rein in illegal file-sharing despite posted warnings on their Web site urging Kazaa users not to swap copyright material.

Wilcox said it had been in the financial interest of Sharman and its partners "to maximize, not minimize, music file-sharing."

He found six of the 10 defendants, including Sharman, its Sydney-based chief executive Nikki Hemming, as well as Altnet, a Sharman software partner, guilty of copyright infringement and ordered them to pay 90 percent of the record industry's costs in the case.

A hearing will be set later to establish damages.

"We will ask the court when it comes to damages to reflect the value of the music these people ripped off," Michael Speck, a spokesman for the Australian recording industry, said of the millions who have downloaded Kazaa.

In a brief statement, Sharman said it would appeal and Kazaa software remained available online, with more than 800,000 downloads reported last week and 390 million total since Kazaa first became available in 2001. Sharman says its software is no different from a tape recorder or photocopier ó and that Kazaa could not control copyright infringement by users.

But Wilcox said that Kazaa's distributors actively encouraged users to share files, the vast majority of which were copyright material.

He said that if Kazaa is to continue its owners will have to ensure that new versions of the software filter out unlicensed copyright material, a task the judge said would be extremely difficult.

Wilcox stressed, however, that he was anxious not to damage legitimate file-swapping with his ruling. He said Kazaa needs to be changed "without unnecessarily intruding on others' freedom of speech and communication."

Kim Weatherall, a lecturer in intellectual property law at Melbourne University, called Wilcox's decision brave but potentially chilling to technology innovators.

"It is clear that the judge is concerned not to stop the technology completely but to try and work some middle line," she said.

The case is the latest in a long line of courtroom showdowns between purveyors of so-called peer-to-peer (P2P) networks and copyright holders led by the music and movie industries.

The U.S. Supreme Court's related June decision gave those industries the go-ahead to proceed with suits against file-sharing software developers
Grokster Ltd. and Streamcast Networks Inc. It said such companies can be liable if they deliberately encourage customers to infringe on copyrights as their businesses attempt to grow audiences and sell more advertising.

In a statement Monday, the
Recording Industry Association of America praised Wilcox's ruling as continuing in that vein: "... this decision reflects a growing, international chorus: those who promote theft can be held accountable no matter how they may attempt to escape responsibility.

"A corrupt business strategy of attempting to hide off-shore is not off-limits to the enforcement of rights by creators or law enforcement," the RIAA added.

Kazaa has lost significant popularity since its 2002 heyday, due in part to legal pressure and sabotage efforts by the recording industry but also to the emergence of competing technologies.

Other peer-to-peer file-sharing tools and services that similarly do not require a central server, including BitTorrent and eDonkey, have supplanted it as the Internet's most popular.

FastTrack, the network tapped by Kazaa users, accounted for 10 percent of traffic volume in a six-week study begun in June of data swapped using the Internet's top four file-sharing applications. The study was done by CacheLogic.

____

On the Net:

Text of the ruling: http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/1242.html

Kazaa's Web site: http://www.kazaa.com

[ThatsJustSick]

They will never stop file sharing thanks to IRC.

[howstrange]

that dood Grockster sounds like one greedy SOB. No different than any "giant corporate" CEO bastard.

[ric]

Grokster to stop distributing file-sharing service

By Andy Sullivan 22 minutes ago

WASHINGTON (Reuters) - File-sharing service
Grokster Ltd. has agreed to stop distributing software that allows users to copy songs over the Internet after losing its case before the
U.S. Supreme Court, a recording industry trade group said on Monday.


The settlement with the
Recording Industry Association of America follows the high court's unanimous ruling in June that Grokster and other "peer to peer" networks can be held liable if they induce users into violating copyright laws.

Grokster, the lead defendant in the case, agreed to stop activity that leads to copyright infringement.

"There are legal services for downloading music and movies. This service is not one of them," read a notice on Grokster's Web site. "Grokster hopes to have a safe and legal service available soon."

The recording industry believes that its five-year sales slump can be traced to networks like Grokster that allow millions of users to copy movies, songs and other files directly from each others' computers.

The RIAA has sued more than 15,500 peer-to-peer users for copyright infringement.

"At the end of the day, this is about our ability to invest in new music. An online marketplace populated by legitimate services allows us to do just that," RIAA chairman Mitch Bainwol said in a statement.

The victory is largely symbolic because Grokster has steadily lost users over the years to more innovative services, said an expert who tracks file-trading traffic.

"It's a very famous brand primarily because of a Supreme Court case," said BigChampagne CEO Eric Garland. "Most people have read about Grokster in the newspaper but have not actually used their software."

A Grokster attorney was not immediately available for comment.


Grokster users will still be able to copy music, movies and software directly from each others' hard drives, as the decentralized nature of most peer-to-peer software makes it impossible to control once it is released on the Internet.

Traffic remains steady over two other popular peer-to-peer services, WinMX and eDonkey, that announced plans to shut down in September, Garland said.

Digital sales from download services and mobile-phone ring tones tripled in the first half of 2005 to about $790 million, or 6 percent of all sales, according to the International Federation of the Phonographic Industry.

But peer-to-peer usage increased as well. An average of 9.2 million users were logged on to peer-to-peer networks in October, up from 6.3 million a year ago, according to BigChampagne.

Grokster is in the process of being sold to Mashboxx LLC, a company that intends to develop an industry-approved peer-to-peer service.

A Grokster rebirth would not be unprecedented. Pioneering file-trading service
Napster re-emerged as a pay service after recording industry lawsuits forced it to shut its doors in 2001.

RIAA members include Vivendi Universal, Warner Music Group Corp., EMI Group Plc. and Sony BMG Music Entertainment.

[xian]

So if I leave my DVD out on my kitchen table and my neighbor takes it and copies it while I'm at work, then I can get sued?

Are they out of the minds with greed?

If you want to sue people who copy movies or songs, so be it. But you can't fine people for leaving their computers unlocked if people take their files and copy them. That's just ludicrous.