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Software Doesn't Break Laws...

By Cynthia L. Webb
washingtonpost.com Staff Writer
Friday, August 20, 2004; 9:47 AM

What do file-sharing companies and the National Rifle Association have in common? A common legal argument, that's what.

The entertainment industry's multi-year legal war to stamp out illegal online file-sharing was dealt a major blow yesterday when a federal court said that two major peer-to-peer software firms can't be held liable for the copyright-infringing activities of their users.

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Software doesn't violate copyrights, people do, or so the argument goes...

A federal appeals court in California ruled that Grokster and StreamCast, maker of the Morpheus P2P software, are not liable for copyright infringement when users of their software trade songs, music and other files online. "In essence, the ruling says file-sharing software is legal. That sets the stage for a potential showdown before the U.S. Supreme Court and more lobbying for legislative solutions," USA Today explained.
USA Today: Ruling Sets Back Music Industry's Piracy Battle
Ninth Circuit decision: MGM v. Grokster (PDF)

CNET's News.com said the "ruling means that companies that write and distribute peer-to-peer software can't be shut down because of the actions of their customers. It did not say file-trading itself is legal, and lower courts in the United States have said individual computer users are breaking the law when they trade copyrighted files without permission. But the ruling does lift the cloud of potential liability from defendants Grokster and StreamCast Networks, as well as from many of their rivals."
CNET's News.com: Judge's Rule File-Sharing Software Legal

So does this mean the file-sharers have won once and for all? According to The Wall Street Journal, not yet: "The ruling yesterday by three judges for the Ninth Circuit Court of Appeals in San Francisco will almost certainly intensify efforts by movie studios, music companies and songwriters -- the plaintiffs in the case -- to curb online piracy through other means. Those efforts are expected to include lobbying for legislation designed to crack down on makers of file-sharing programs and lawsuits against individuals who share pirated files over the Internet. Music companies have already been filing such lawsuits for about a year, though the Hollywood studios have not yet followed suit." But the ruling certainly changes the situation on the battlefield, as the Journal concluded: "Though the fight over online piracy is far from over, the appeals court ruling seemed to tilt the years-long battle largely in favor of technology companies."
The Wall Street Journal: Green Light For Grokster (Subscription required)

The Los Angeles Times also noted in its coverage that Capitol Hill will be the next stop for the file-swapping fight: "The battle over file sharing is now likely to shift to Washington. Congress is considering a bill that would crack down on the companies making the software used by millions to copy music, movies and games over the Internet. What's more, if the entertainment industry appeals the decision, the U.S. Supreme Court could revisit its landmark Sony Betamax ruling, which protects from copyright lawsuits products that have substantial legitimate uses," reporter Jon Healey wrote.

Ironically, the same court helped kill off the Napster file-sharing service in a previous ruling. The Los Angeles Times explained why the new generation file-sharing sites were spared: "The same appeals court came to a different conclusion about Napster in 2001, holding the pioneering file-sharing service responsible for its users' illegal activity because its central computers tracked all the songs available for downloading. But today's file-sharing networks have no central computers. The companies behind such 'peer to peer' systems cannot even monitor users, let alone rein them in, Judge Sidney R. Thomas noted in his opinion for the appeals panel." More on this from the Associated Press: "The panel noted that the software companies simply provided software for individual users to share information over the Internet, regardless of whether that shared information was copyrighted."
Los Angeles Times: Legal Victory For File Sharing (Registration required)
The Associated Press via The Washington Post: Grokster, StreamCast Not Liable (Registration required)

Thursday's ruling was certainly cheered by P2P site Kazaa, which will use the decision to its advantage. "The court found that the file-sharing networks have legitimate uses, allowing the band Wilco, for instance, to distribute online an album its record label declined to release. The ruling also will affect the entertainment industry's pending case in Los Angeles federal court against Sharman Networks, owner of Kazaa, the world's largest file-sharing network," the San Jose Mercury News reported.
San Jose Mercury News: Ruling Backs File Sharers (Registration required)

Expect a version of this logic to be used going forward. BBC News Online quoted Fred von Lohmann of the Electronic Frontier Foundation, who represented StreamCast in the case. Lohmann: "The same principle that people who make crowbars are not responsible for the robberies that may be committed with those crowbars." Crow bars don't kill people, people kill people...
BBC News Online: File-Sharing Systems In Legal Win

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