US court says file-sharing sites are not illegal
The entertainment industry's efforts to clamp down on the rising threat from online video and music downloads have suffered a major setback after a US court said file-sharing networks were not breaking the law.
Plans by the entertainment industry to shut down file-sharing networks Morpheus and Grokster - used to swap music and movies online - were blocked by a US court, which said such services should not be held responsible for the actions of their users.
The decision is a major blow for the record labels and Hollywood studios that had sued the file-sharing networks in a bid to stamp out the £4bn a year the entertainment industry says it loses from illegal music and video downloads.
Judge Sidney Thomas said users should not hold file-sharing or peer-to-peer networks responsible for the swapping of copyright content.
The judge said that neither Grokster nor Morpheus knew what songs or films were being swapped on their networks as neither operated a central computer database so could net even monitor, let alone prevent, copyright infringement.
"The introduction of new technology is always disruptive to old markets and particularly to those copyright owners whose works are sold through well-established distribution mechanisms," he said
"History has shown that time and market forces often provide equilibrium in balancing interests... (and) it is prudent for courts to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude."
Jack Valenti, the outgoing head of the Motion Picture Association of America, said the Hollywood lobbying group would now have to consider its next move.
"We are carefully reviewing our next steps. Our direction and conviction will not falter, and we will continue to pursue all avenues in our power to fight those who illicitly profit from our members' valuable property," he said.
But Michael Weiss, the chief executive of Morpheus parent StreamCast Networks, claimed the ruling was a major triumph for file sharing.
"Not only is today's ruling a victory for Morpheus a hard-fought one at that, but this is a victory for our fellow P2P developers, a victory for American innovation and, perhaps more importantly, history will prove this to be a bigger win for the entertainment industry," he said.
Hopefully they will now embrace new technologies, like Morpheus, to seek new opportunities for artists and creators in the digital domain rather then spend their time and money trying to stifle progress."
Fred von Lohmann, the lawyer who represented the two file-sharing networks, said the case also had wider ramifications.
"The reason we took this case is to make it clear that people who develop new technologies should not have to face endless expensive litigation from Hollywood even where those technologies may disrupt existing business models," he said.
But the chief executive of the Recording Industry Association of America, Mitch Bainwol, said the lobbying group would continue to fight illegal music downloads.
"This decision does nothing to absolve these businesses from their responsibility as corporate citizens to address the rampant illegal use of their networks," he said in a statement.
mediaguardian
