The entertainment industry yesterday scored a landmark victory in its effort to crack down on the illegal file-sharing of music and films.
In a ruling that could spell the end for the ”peer-to-peer” networks that have flourished online, the United States supreme court said software makers can be held liable for enabling computer users to copy protected work without permission.
Tens of millions of people around the world use peer-to-peer networks such as Grokster and Morpheus to copy music and films for free from other computer users’ hard drives. Compact disc sales have fallen by around 25% since 1999 when the first generation of file-sharing networks emerged.
Warner Music chief executive Edgar Bronfman hailed the ruling as an ”important decision”.
With no other legal avenues open, the entertainment industry has in recent years pursued individual users, filing hundreds of lawsuits and hoping that the fear of litigation might stem copyright abuse. Those suits though, against children as young as 12, have generated a tide of negative publicity for the business.
Armed with the supreme court ruling, the industry can now go after the makers of the technology, which are mostly based in the US.
”The bottom line is that consumers are going to have to get used to paying for their music. Period,” said Wayne Rosso, the former Grokster president.
He said he expected a ”hailstorm” of lawsuits to be filed against software firms.
The decision will help to shape the still developing framework of online copyright laws.
”The fact is that the Grokster service was being used substantially to infringe copy rights with the full knowledge of Grokster,” said Michael Graif, at the law firm Chadbourne & Parke. ”The decision is going to have a huge impact on how copyright owners ultimately protect their property.”
The ruling stemmed from a 2001 lawsuit filed against the software makers Grokster and StreamCast Networks by 28 companies including MGM, Walt Disney, EMI, Time Warner and News Corporation.
The supreme court overturned an appeal court decision in favour of the software makers. The appeal court had cited a 1984 supreme court ruling that Sony could not be held liable if users of its Betamax video recorder copied television shows illegally because the VCR could also be used for legitimate purposes.
Lawyers for the entertainment industry argued that the likes of Grokster were used almost exclusively for illegal purposes and that the comparison did not hold. The court agreed.
”We hold that one who distributes a device with the object of promoting its use to infringe copyright … is liable for the resulting acts of infringement by third parties,” justice David Souter wrote in the decision.
”There is no evidence that either company made an effort to filter copyrighted material from users’ downloads or otherwise impede the sharing of copyrighted files.”
The music industry had managed to close the first of the rogue file-sharing networks, Napster, in 2001. The current generation of file-sharing networks differ by allowing users to search each others’ computers directly instead of uploading files on to a central server.
The British music industry association, the BPI, welcomed the ruling but said it would continue to bring legal action against individuals caught file-sharing as well the companies involved. The BPI has so far taken action against 90 people, most of whom have settled out of court.
John Kennedy, chairperson of the recording industry group, the IFPI, said it was ”the most important judgement involving the music industry in 20 years. It quite simply destroys the argument that peer-to-peer services bear no responsibility for illegal activities that take place on their networks”.
Apple has provided some hope to the music industry with the iPod, its hand-held music device and the iTunes service that has become the first high-profile successful pay site.
The service from Apple has also proven that consumers are willing to pay to download music when there is a legitimate service available.
The entertainment industry has come under intense criticism for attempting to stifle digital distribution instead of devising ways to make it pay.
Referring to Monday’s ruling, Wall Street analyst Tom Wolzien said: ”It doesn’t change the underlying fact that the media companies have to respond to consumer demand for new methods of delivery.” – Guardian Unlimited Â