Judge: File-swapping tools are legal

Copyright ©2006 CNET Networks, Inc.

http://news.com.com/2100-1027_3-998363.html

Judge: File-swapping tools are legal
By John Borland
Staff Writer, CNET News.com
Published: April 25, 2003, 12:46 PM PDT

A federal judge in Los Angeles has handed a stunning court victory to
file-swapping services Streamcast Networks and Grokster, dismissing
much of the record industry and movie studios' lawsuit against the two
companies.

In an almost complete reversal of previous victories for the record
labels and movie studios, federal court Judge Stephen Wilson ruled
that Streamcast--parent of the Morpheus software--and Grokster were
not liable for copyright infringements that took place using their
software. The ruling does not directly affect Kazaa, software
distributed by Sharman Networks, which has also been targeted by the
entertainment industry.

"Defendants distribute and support software, the users of which can
and do choose to employ it for both lawful and unlawful ends," Wilson
wrote in his opinion, released Friday. "Grokster and StreamCast are
not significantly different from companies that sell home video
recorders or copy machines, both of which can be and are used to
infringe copyrights."

The ruling is the second major setback to date to the entertainment
industry's efforts to keep a tight rein on online file-swapping,
following a similiar decision in the Netherlands last year that found
that Kazaa was not liable for its users' copyright infringements. If
upheld, the decision could lead artists, record labels and movie
studios to cast new legal strategies that they have until now been
reluctant to try, including bringing lawsuits against individuals who
copy unauthorized works over Napster-like networks.

According to the major record labels, file-swapping is a major
contributor to declines in music sales over the past few years, a
trend that has thrown the industry into disarray. Debt-ridden media
conglomerates are now considering sales of their music divisions even
as they begin to test paid online music services intended to compete
with free file-swapping networks and turn the tide.

Attorneys called the ruling a blow for entertainment and record
companies trying to stop the networks used to swap unauthorized copies
of their works.

"This is a very serious setback for the record industry and other
content industries, because they've uniformly won these cases in the
U.S.," Mark Radcliffe, an intellectual property attorney at Gray Cary
Ware & Freidenrich said.

While the ruling in no way validates the legality of downloading
copyrighted music online, it would shield companies providing
decentralized file-swapping software such as Gnutella from liability
for the actions of people using their products.

As such, it could provide new leverage for file-swapping companies
such as Grokster, Streamcast and Sharman in negotiations with record
companies and other copyright holders to license works legitimately.
Since Napster's $1 billion settlement offer with the record industry
in 2001, file-swapping companies have repeatedly sought an amicable
settlement with copyright holders but have been almost universally
rebuffed.

The court's ruling applies only to existing versions of the Morpheus
and Grokster software. Earlier versions of the software, which
functioned slightly differently, could potentially leave the companies
open to liability.

A spokeswoman for the Motion Picture Association of America (MPAA)
said the copyright holders were deeply disappointed in the decision
and would certainly appeal.

"We feel strongly that those who encourage, facilitate and profit from
piracy should be held accountable for actions," MPAA spokeswoman Marta
Grutka said. "We're hoping that people aren't taking this as an
invitation to continue along the path of what is clearly illegal
activity."

Recording industry officials said they saw some good in the ruling,
but that they too would immediately appeal to the 9th Circuit Court of
Appeals.

"We are pleased with the Court's affirmation that individual users are
accountable for illegally uploading and downloading copyrighted works
off of publicly accessible peer-to-peer networks," said Recording
Industry Association of America (RIAA) chief executive officer Hilary
Rosen in a statement. "(But) businesses that intentionally facilitate
massive piracy should not be able to evade responsibility for their
actions."


Wilson's decision comes in the most closely watched Net copyright case
since Napster's demise.

The two pieces of file-swapping software affected by Friday's ruling
remain among the most popular downloads on the Net, although they
operate deep in the shadow of market leader Kazaa. Morpheus--once the
undisputed leader--has fallen to about 120,000 downloads per week,
according to Download.com, a software aggregation site operated by
News.com publisher CNET Networks. Kazaa, by contrast, was downloaded
more than 2.7 million times during the past week.

The RIAA and the MPAA sued Streamcast, Grokster, and the original
parent company of Kazaa's software in October 2001, and the case has
been making its way slowly through court since that time.

In late 2002, both sides asked the judge for summary judgment, or a
quick ruling in their favor before going to a full trial. Wilson's
decision in favor of the file-swapping companies Friday was tied to
that months-old series of requests.

The decision does not directly affect Kazaa, at least not immediately.
At the time that Grokster and Streamcast were arguing for summary
judgment, Wilson had not yet ruled that the Australia-based Sharman
Networks could be sued in the United States.

Sharman is scheduled to meet with RIAA and MPAA attorneys in court on
Monday, to argue over whether its counterclaim against the record
labels and movie studios should be dismissed. Friday's ruling,
however, could change the direction of that hearing.

The judge's surprise ruling marked the first validation of an argument
that file-swapping supporters have been making since Napster's first
controversial arrival. Peer-to-peer file-trading is a technology that
can be used for activities well beyond copyright infringement, and the
technology should not be blocked altogether to stop solely its illegal
uses, these backers have said.

In making that argument, the judge looked back to the landmark 1984
Supreme Court ruling that upheld the legality of Sony's Betamax
videocassette recorder (VCR). That decision helped establish the
doctrine of "substantial noninfringing use," which protects technology
providers that distribute products--like the VCR or photocopier--that
can be used for both legal and illegal purposes.

"We are absolutely very proud of this judge for having the unusual
capacity to be able to grasp the technology and its future benefit to
taxpayers and shareholders around the world," said Wayne Rosso,
president of Grokster. "Technology is usually way ahead of courts and
legislature. The fact that judge was able to acutely comprehend (this
technology) is a credit to the legal system."

Not like Napster
Much of Wilson's ruling hung on the technological differences between
Napster and the newer, decentralized file-swapping services.

Napster's service opened itself to liability for its users' actions by
actively playing a role in connecting people who were downloading and
uploading songs--a little like a physical swap meet provides the
facilities for people exchanging illegal material, the judge said. By
contrast, Grokster and Streamcast distributed software to people and
had no control over what their users did afterwards, Wilson said.

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 infringement. "If either defendant closed their
doors and deactivated all computers within their control, users of
their products could continue sharing files with little or no
interruption."

It didn't matter that the companies were aware generally of copyright
infringement happening using their software, Wilson added--they would
have to know of specific instances of infringement and be able to do
something about it, to be liable for those users' actions.

That stands in stark contrast to an earlier ruling against
file-swapping company Aimster, in which the judge explicitly said the
file-trading company did not need to know about individual acts of
copyright infringement as they were happening to be held liable for
the illegal activity.

Friday's decision is likely to send shock waves throughout the
copyright and technology communities, which have adjusted slowly over
the last year to the notion that file-trading services such as these
were mostly likely illegal. Technology companies have complained that
the repeated lawsuits have stifled innovation, but many also have
begun to move forward in alliances with authorized music--and
film-distribution services.

The case will certainly be appealed. Because different courts have
come to very different conclusions about the law, the issue could go
as high as the U.S. Supreme Court, a process that would likely take
years.

"This is far from over," said Fred von Lohmann, an Electronic Frontier
Foundation attorney who has represented Streamcast in the case. "This
is not the end, but it sends a very strong message to the technology
community that the court understands the risk to innovation."

In the interim, the ruling is likely to produce another round of
interest in legislation affecting copyright issue on the Net--an
outcome that Wilson himself foresaw.

Policy, "as well as history, supports our consistent deference to
Congress when major technological innovations alter the market for
copyrighted materials," Wilson wrote. "Congress has the constitutional
authority and the institutional ability to accommodate fully the
raised permutations of competing interests that are inevitably
implicated by such new technology...Additional legislative guidance
may be well-counseled."


--

"First and last, it's a question of money. Those men who own the earth
make the laws to protect what they have. They fix up a sort of fence or
pen around what they have, and they fix the law so the fellow on the
outside cannot get in. The laws are really organized for the protection of
the men who rule the world. They were never organized or enforced to do
justice. We have no system for doing justice, not the slightest in the
world."
--Clarence Darrow

Citizen Bob

"Citizen Bob" <> wrote in message
news:...
| Copyright ©2006 CNET Networks, Inc.
|
| http://news.com.com/2100-1027_3-998363.html
|
| Judge: File-swapping tools are legal
| By John Borland
| Staff Writer, CNET News.com
| Published: April 25, 2003, 12:46 PM PDT

^^^^

This judgment has been overruled by so many other court cases, the list is
way too long...

JaF

Just a Friend

Just a Friend wrote:
> "Citizen Bob" <> wrote in message
> news:...
> | Copyright ©2006 CNET Networks, Inc.
> |
> | http://news.com.com/2100-1027_3-998363.html
> |
> | Judge: File-swapping tools are legal
> | By John Borland
> | Staff Writer, CNET News.com
> | Published: April 25, 2003, 12:46 PM PDT
>
> ^^^^
>
> This judgment has been overruled by so many other court cases, the list is
> way too long...
>
> JaF

No sympathy for the music industry. Decades of stupidity have caused
their
own problems. Overpriced product with most albums consisting of 50%
filler
hardly worth listening to.

--
"Well Good Grief.....What is wrong with these eBay sellers?

Yahoo is free. No listing fees. No final value fees. Yahoo has a bulk
loader.
Your listings actually show up in the search. Your listings also show
up in
Yahoo's shopping search. Yahoo has more traffic than eBay stores.

But eBay sellers want to pay $15.95 month store fees. 5 cent listing
fees.
10% final value fees. And for all these fees eBay buries their store
items
on the back end of eBay and they don't even show up in the search.

Sellers could have it all and not even a small percentage of eBay's
store sellers
can grasp the concept of listing and selling for free on Yahoo and
keeping all their profits."

----------
"Sellers could have it all, and with so many working so hard to make
minimum
wage on eBay, they don't even get it. As simple as taking a day to move
their listings
to Yahoo and eBay would be slashing their fees and bending over
backwards
trying to get them back. All that potential. What a waste. "

--------------
It's somewhat rare for the typical eBay seller to actually DO
something.
You are in a small minority.

I realize in many cases, sellers have immediate financial needs, but
judging from the completed auctions I seriously doubt the majority
of sellers a making more than minimum wage for their time (at best).

Reading the pathetic pleading on eBays message boards I wonder
if any of these people are even capable of understanding what
an incredible event it would be if they simply turned their backs
on eBay and moved their listings to Yahoo.

At this point it should be a "no brainer" and is well within their
reach.
It would send eBay reeling. And improve the situation for online
sellers
for years to come.

Instead of meek lambs, struggling for their survivial on eBay,
sellers would be saying, "YES, WE DID THAT".

--------------

traffik33

"Just a Friend" <> wrote in message
news:CQr2h.1929$...
> "Citizen Bob" <> wrote in message
> news:...
> | Copyright ©2006 CNET Networks, Inc.
> |
> | http://news.com.com/2100-1027_3-998363.html
> |
> | Judge: File-swapping tools are legal
> | By John Borland
> | Staff Writer, CNET News.com
> | Published: April 25, 2003, 12:46 PM PDT
>
> ^^^^
>
> This judgment has been overruled by so many other court cases, the list is
> way too long...
>
> JaF

This judgment has not been overruled. As far as I know, there are no 9th
Circuit appellate opinions addressing this (though I may be wrong). Circuit
Courts of Appeal opinions are controlling in their own circuits. This is a
district court opinion, so it is not controlling anywhere, but would be
considered extremely persuasive, particularly since it originates from the
Central District, which, along with the Northen District of California, are
considered "leading" districts for intellectual property law. I haven't
read the opinion, but I'm very familiar with Judge Wilson, and have
litigated before him previously. He's not sloppy and he's very smart. This
is a significant holding and, contrary to your contention, is valid law.


>
>

PTravel

"PTravel" wrote ...
> This judgment has not been overruled. As far as I know, there are no 9th
> Circuit appellate opinions addressing this (though I may be wrong).
> Circuit Courts of Appeal opinions are controlling in their own circuits.
> This is a district court opinion, so it is not controlling anywhere, but
> would be considered extremely persuasive, particularly since it originates
> from the Central District, which, along with the Northen District of
> California, are considered "leading" districts for intellectual property
> law. I haven't read the opinion, but I'm very familiar with Judge Wilson,
> and have litigated before him previously. He's not sloppy and he's very
> smart. This is a significant holding and, contrary to your contention, is
> valid law.

Does this ruling apply to the tool itself, or to how people USE the tool?
Even lock picks have a legitimate use if you are a locksmith, etc. And
fast cars aren't illegal just because bank robbers use them to get away
from the crime-scent/authorities, or even because some people break
the speed limit in them.

Does this actually change the concept of "fair use" or the intent of the
copyright laws?

Richard Crowley

"Richard Crowley" <> wrote in message
news:...
> "PTravel" wrote ...
>> This judgment has not been overruled. As far as I know, there are no 9th
>> Circuit appellate opinions addressing this (though I may be wrong).
>> Circuit Courts of Appeal opinions are controlling in their own circuits.
>> This is a district court opinion, so it is not controlling anywhere, but
>> would be considered extremely persuasive, particularly since it
>> originates from the Central District, which, along with the Northen
>> District of California, are considered "leading" districts for
>> intellectual property law. I haven't read the opinion, but I'm very
>> familiar with Judge Wilson, and have litigated before him previously.
>> He's not sloppy and he's very smart. This is a significant holding and,
>> contrary to your contention, is valid law.
>
> Does this ruling apply to the tool itself, or to how people USE the tool?

I haven't read the opinion, but I suspect only to the tool itself, i.e. if
you use it to exchange files in violation of copyright, you have infringed.
Of course, as with any instance of unauthorized copyring, fair use defenses,
if available, would apply.

> Even lock picks have a legitimate use if you are a locksmith, etc. And
> fast cars aren't illegal just because bank robbers use them to get away
> from the crime-scent/authorities, or even because some people break
> the speed limit in them.
>
> Does this actually change the concept of "fair use" or the intent of the
> copyright laws?

As I said, I haven't read the opinion. However, I cannot imagine it
extending fair use to the kind of conduct that has been held infringing,
e.g. downloading music, etc.

>
>

PTravel

On Thu, 02 Nov 2006 14:09:52 GMT, (Citizen Bob) Gave us:

>
>Judge


It's 3 years old, you ****ing goddamned cross posting, Usenet
retard! There has been new litigation opened since then.

JoeBloe

Just a Friend wrote:

> Citizen Bob wrote:

>| Copyright ©2006 CNET Networks, Inc.
>|
>| http://news.com.com/2100-1027_3-998363.html
>|
>| Judge: File-swapping tools are legal
>| By John Borland
>| Staff Writer, CNET News.com
>| Published: April 25, 2003, 12:46 PM PDT

>This judgment has been overruled by so many other court cases, the list is
>way too long...

The only one I can think of is the Supreme Court decision against
Grokster (MGM v. Grokster), but the court opinion made it clear that
the main reason the decision went against Grokster was because the
company actively promoted the product as for use in illegal downloads.
From the majority opionion (written by Souter): "Grokster and
StreamCast are not, however, merely passive recipients of information
about infringing use. The record is replete with evidence that from
the moment Grokster and StreamCast began to distribute their free
software, each one clearly voiced the objective that recipients use it
to download copyrighted works, and each took active steps to encourage
infringement."

On the other hand, Attorney General Reno v. ACLU, which overturned the
Communications Decency Act, said that there is such a thing as going
too far in controlling the Internet: "In [an earlier case], we
remarked that the speech restriction at issue there amounted to
'burn[ing] the house to roast the pig.' The CDA, casting a far darker
shadow over free speech, threatens to torch a large segment of the
Internet community." (And, of course, the grandaddy of "the right of
non-infringing uses", Sony v. Universal Studios et al., which made
VCRs legal despite the fact that they could be used to make copies of
TV shows.)

-- Don

Don Del Grande

"Richard Crowley" <> wrote:

> Does this ruling apply to the tool itself, or to how people USE the
> tool? Even lock picks have a legitimate use if you are a locksmith,
> etc. And fast cars aren't illegal just because bank robbers use them
> to get away from the crime-scent/authorities, or even because some
> people break the speed limit in them.
>
> Does this actually change the concept of "fair use" or the intent of
> the copyright laws?

Probably not. From what I could see in the article presented, the
decision had nothing to do with the legality of file-sharing. It
appears only to reiterate Universal, et alia v Sony in that the
tools themselves are not illegal because they have legitimate,
non-infringing uses, and that the manufacturers of those tools,
like Sony and the Betamax, are not liable for losses incurred on
the part of copyright owners because some people choose to use
the tools illegally.

-- jayembee

jayembee

On Thu, 02 Nov 2006 19:40:18 GMT, "Just a Friend"
<> wrote:

>| Judge: File-swapping tools are legal
>| By John Borland
>| Staff Writer, CNET News.com
>| Published: April 25, 2003, 12:46 PM PDT

>This judgment has been overruled by so many other court cases, the list is
>way too long...

Provide links, please.

Conflicting rulings are the stuff from which Supreme Court challenges
are made.

Just because a prior ruling is overruled does not make it invalid.


--

"First and last, it's a question of money. Those men who own the earth
make the laws to protect what they have. They fix up a sort of fence or
pen around what they have, and they fix the law so the fellow on the
outside cannot get in. The laws are really organized for the protection of
the men who rule the world. They were never organized or enforced to do
justice. We have no system for doing justice, not the slightest in the world."
--Clarence Darrow

Citizen Bob