Recording, movie industries appeal file-trading ruling
Claim P2P services make huge profit from copyright infringement
Story by Grant Gross, IDG News Service
AUGUST 20, 2003 ( IDG NEWS SERVICE ) - WASHINGTON -- Three entertainment groups have appealed an April 25 U.S. District Court ruling saying that operators of two file-sharing services aren't liable for any copyright infringement that may be happening on their networks.
Late on Aug. 18, the Recording Industry Association of America Inc. (RIAA), the Motion Picture Association of America (MPAA) and the National Music Publishers' Association Inc. filed an appeal to a Los Angeles district court judge's decision that said the operators of the Grokster and Morpheus peer-to-peer (P2P) services couldn't know when users were trading copyrighted works (see story)
As expected, the three groups have asked the U.S. Court of Appeals for the Ninth Circuit to overturn the decision by U.S. District Court Judge Stephen Wilson and hold Grokster Ltd. and StreamCast Networks Inc., the operator of Morpheus, responsible for copyright violations that happen on those P2P networks.
Wilson's decision recognized that P2P services have many legitimate uses, Michael Weiss, CEO of Franklin, Tenn.-based StreamCast Networks, said in a statement. "In our case ... the federal court recognized that you can't ban new technology just because it threatens an old distribution model," he added. "We expect to prevail, and if we do not, we will take this to the Supreme Court if we must. We also believe that the 63 million file-sharing, voting Americans will take the issues to Congress, so that the laws are passed to reflect social and economic realities."
New laws should allow for compulsory licensing similar to radio royalties, Weiss said, and he also suggested a small tax on recordable media.
The RIAA and MPAA argued in their appeal brief that the P2P services make a huge profit from copyright infringement. "Defendants reap millions of dollars in revenue from their online trading bazaars by selling advertising they display to their users while they engage in infringement," the brief said.
The judge's decision "rewrote years of well-established copyright law," Cary Sherman, president of the Washington-based RIAA, said in a statement. "It was wrong. These are businesses that were built for the exclusive reason of illegally exchanging copyrighted works, and they make money hand over fist from it."
