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Court Hears File-Sharing Case Arguments

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_____Digital Rights_____
Tauzin Expected To Leave House For Trade Group (The Washington Post, Jan 24, 2004)
A Reprise Of Lawsuits Over Piracy (The Washington Post, Jan 22, 2004)
RIAA Sues Song-Swapping Suspects (washingtonpost.com, Jan 21, 2004)
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By Bob Tourtellotte
Reuters
Tuesday, February 3, 2004; 6:10 PM

LOS ANGELES -- In a landmark case over online piracy, a federal appeals court Tuesday considered whether Napster-like Internet services can be shut down if their users swap unauthorized copies of movies and music.

Lawyers for the entertainment industry squared off against attorneys for file-sharing services Grokster and Morpheus before a three-judge panel of the U.S. 9th Circuit Court of Appeals in Pasadena to revisit a key ruling by a lower court.

That decision by a federal judge in Los Angeles rejected a bid by film studios and record labels to shut down Grokster and Morpheus, saying the file-sharing services enjoyed the same legal protection as the makers of videocassette and DVD recorders.

That ruling in turn relied on a 1984 U.S. Supreme Court decision that held that Sony Corp. was not liable for copyright infringement by selling VCRs that allowed users to tape TV shows -- a legal finding that became known as the "Betamax Doctrine."

"While the odds are against them, they (music and movie makers) have a lot to gain. If they could get a win, it would be a huge win," said Evan Cox, an intellectual property attorney in the San Francisco office of Covington and Burling.

Music companies claim song swapping has caused lower sales of CDs because customers copy their free digital music files onto blank CDs, which violates U.S. copyright law.

Film studios believe if they do not stop piracy now, it will hurt them in the long run since downloading digital movies is expected to grow more common with the spread of broadband Internet connections.

Until the April 2003 ruling by U.S. District Judge Stephen Wilson, the record and movie companies had been successful in pursuing a legal course to shut down sites like Grokster and Morpheus, such as the song-swapping pioneer Napster.

After the ruling the record industry shifted tactics, filing suit against thousands of individuals for copyright infringement -- a move that risked alienating music fans.

On Tuesday, lawyers for the Recording Industry Association of America, National Music Publishers' Association. and Motion Picture Association. of America, were prepared to argue to the appellate court that the initial ruling in favor of Grokster and Morpheus was flawed.

Attorneys for Grokster and Streamcast Networks Inc., which distributes the Morpheus software, will counter that Wilson correctly applied the Sony Betamax ruling.

In the Sony case, the Supreme Court said VCRs had substantial uses besides the taping of copyrighted material and that those uses outweighed the copying function in question.

"The Sony Betamax case created an exception for somebody who makes a product and releases it but isn't too much involved with the use of that product," Cox said.

Similarly, Wilson ruled that Grokster and Morpheus simply provide the software for song and movie swapping, but do not dictate how the software is used. The software also had other substantial, non-infringing uses, Wilson said.

In their appeal, attorneys for the music and movie makers will argue that the software is the underlying reason users flock to the Grokster and Morpheus Web sites where the operators reap profits from advertising.

They will also argue that the Web sites regularly apply software filters to block out pornography, computer viruses and bogus files, and there is no reason the Web sites cannot apply similar filters to screen for copyrighted material.


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