Max
04-30-2003, 11:13 AM
Judge sides with file-swappers
By Mathew Ingram
Globe and Mail Update
POSTED AT 4:24 PM EST Tuesday, Apr. 29, 2003
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The recording industry likes to portray itself, in its battle against digital file-swapping networks, as a cross between the Justice League of comic-book superheroes and a legal steamroller, an implacable force of righteousness that crushes all opposition in its quest for truth and justice. Every now and then, however, this juggernaut runs into a bump -- and it did exactly that last week, when a U.S. judge ruled in favour of the file-swappers.
Friday's ruling by U.S. District Court judge Stephen Wilson was a coup for the two file-sharing networks that were the subject of the lawsuit -- Streamcast Networks, which distributes the Morpheus file-sharing application, and Grokster, which provides access to the FastTrack network -- because Judge Wilson accepted the central argument made by the defence. That argument rests on the Betamax case, which dates back to 1984.
In that case, the Motion Picture Association of America (MPAA) sued Sony Corp. in an attempt to stop it from selling its then-new Betamax videocassette recorders to consumers (a format that eventually gave way to the VHS standard). The major movie studios and television networks argued that this technology would allow consumers to illegally record and share copyright-protected movies and television shows at will.
The court eventually decided in favour of Sony, however, ruling that while the VCR clearly could be used to infringe on copyright-protected content, the technology also had what the court referred to as "substantial noninfringing uses." The judge also found that Sony could not be held liable for any copyright-infringing conduct entered into by users of its product, since the company had no way of preventing such infringement.
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," Judge Wilson found. While companies such as Sony may know that their products will be used illegally by some users, liability for infringement does not exist simply because peer-to peer file-sharing technology can be used to infringe on copyrights.
The judge also accepted the argument that Grokster and StreamCast are qualitatively different from Napster, the pioneering network that was driven into bankruptcy by lawsuits. In that case, Napster was found to have contributed to infringement by providing a forum for the swapping of illegal files -- a forum it controlled access to. The court compared it to a swap meet where management knew illegal goods were for sale.
In the case of Grokster, however, Judge Wilson pointed out that since the software uses the FastTrack network -- controlled by Sharman Networks, distributors of Kazaa -- it has no influence over the use of that network, nor any ability to stop acts of copyright infringement. Streamcast, meanwhile, uses the "open source" Gnutella standard, which is not controlled by any single entity. In contrast to Napster, he ruled, neither network maintains its own servers as hosts for infringing files.
"Neither Grokster nor StreamCast provides the 'site and facilities' for direct infringement," the judge wrote in his decision. "Users connect to the respective networks, select which files to share, send and receive searches, and download files, all with no material involvement of defendants. If either defendant closed their doors and deactivated all computers within their control, users of their products could continue sharing files."
When it comes to contributory infringement, a party is liable if "with knowledge of the infringing activity, [he/she] induces, causes or materially contributes to the infringing conduct of another," Judge Wilson wrote. The Ninth Circuit Court ruled in the Napster case that "a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows for the exchange of copyrighted material."
In order to be liable, the companies must also have had actual knowledge of the infringement -- "at a time when they can use that knowledge to stop the particular infringement." In the same way, a landlord would not be considered liable for any illegal activity that occurs in an apartment if he had no way of knowing when he rented it that such activity would occur.
The judge also ruled that the two networks were innocent of "vicarious infringement." While Judge Wilson agreed that Grokster and Streamcast had a financial interest in the form of ad revenue, he said they "provide software that communicates across networks that are entirely outside defendants' control ... there is no admissible evidence before the court indicating that defendants have the ability to supervise and control" conduct.
The RIAA and the other plaintiffs in the case said that they would appeal the judge's ruling, and Judge Wilson also took care to note that his decision had no impact on the liability of Sharman Networks -- the distributor of Kazaa and operator of the FastTrack network -- which is subject to a separate lawsuit.
However, it's clear that file-swapping has won a critical round in the ongoing copyright battle, if only because it shows there is substantial legal basis for the Betamax defence.
E-mail Mathew Ingram at mingram@globeandmail.ca
Look for exclusive Mathew Ingram commentary at GlobeInvestorGold
http://www.globeandmail.com/servlet/story/RTGAM.20030429.wmath429/BNStory/Business
By Mathew Ingram
Globe and Mail Update
POSTED AT 4:24 PM EST Tuesday, Apr. 29, 2003
Advertisement
The recording industry likes to portray itself, in its battle against digital file-swapping networks, as a cross between the Justice League of comic-book superheroes and a legal steamroller, an implacable force of righteousness that crushes all opposition in its quest for truth and justice. Every now and then, however, this juggernaut runs into a bump -- and it did exactly that last week, when a U.S. judge ruled in favour of the file-swappers.
Friday's ruling by U.S. District Court judge Stephen Wilson was a coup for the two file-sharing networks that were the subject of the lawsuit -- Streamcast Networks, which distributes the Morpheus file-sharing application, and Grokster, which provides access to the FastTrack network -- because Judge Wilson accepted the central argument made by the defence. That argument rests on the Betamax case, which dates back to 1984.
In that case, the Motion Picture Association of America (MPAA) sued Sony Corp. in an attempt to stop it from selling its then-new Betamax videocassette recorders to consumers (a format that eventually gave way to the VHS standard). The major movie studios and television networks argued that this technology would allow consumers to illegally record and share copyright-protected movies and television shows at will.
The court eventually decided in favour of Sony, however, ruling that while the VCR clearly could be used to infringe on copyright-protected content, the technology also had what the court referred to as "substantial noninfringing uses." The judge also found that Sony could not be held liable for any copyright-infringing conduct entered into by users of its product, since the company had no way of preventing such infringement.
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," Judge Wilson found. While companies such as Sony may know that their products will be used illegally by some users, liability for infringement does not exist simply because peer-to peer file-sharing technology can be used to infringe on copyrights.
The judge also accepted the argument that Grokster and StreamCast are qualitatively different from Napster, the pioneering network that was driven into bankruptcy by lawsuits. In that case, Napster was found to have contributed to infringement by providing a forum for the swapping of illegal files -- a forum it controlled access to. The court compared it to a swap meet where management knew illegal goods were for sale.
In the case of Grokster, however, Judge Wilson pointed out that since the software uses the FastTrack network -- controlled by Sharman Networks, distributors of Kazaa -- it has no influence over the use of that network, nor any ability to stop acts of copyright infringement. Streamcast, meanwhile, uses the "open source" Gnutella standard, which is not controlled by any single entity. In contrast to Napster, he ruled, neither network maintains its own servers as hosts for infringing files.
"Neither Grokster nor StreamCast provides the 'site and facilities' for direct infringement," the judge wrote in his decision. "Users connect to the respective networks, select which files to share, send and receive searches, and download files, all with no material involvement of defendants. If either defendant closed their doors and deactivated all computers within their control, users of their products could continue sharing files."
When it comes to contributory infringement, a party is liable if "with knowledge of the infringing activity, [he/she] induces, causes or materially contributes to the infringing conduct of another," Judge Wilson wrote. The Ninth Circuit Court ruled in the Napster case that "a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows for the exchange of copyrighted material."
In order to be liable, the companies must also have had actual knowledge of the infringement -- "at a time when they can use that knowledge to stop the particular infringement." In the same way, a landlord would not be considered liable for any illegal activity that occurs in an apartment if he had no way of knowing when he rented it that such activity would occur.
The judge also ruled that the two networks were innocent of "vicarious infringement." While Judge Wilson agreed that Grokster and Streamcast had a financial interest in the form of ad revenue, he said they "provide software that communicates across networks that are entirely outside defendants' control ... there is no admissible evidence before the court indicating that defendants have the ability to supervise and control" conduct.
The RIAA and the other plaintiffs in the case said that they would appeal the judge's ruling, and Judge Wilson also took care to note that his decision had no impact on the liability of Sharman Networks -- the distributor of Kazaa and operator of the FastTrack network -- which is subject to a separate lawsuit.
However, it's clear that file-swapping has won a critical round in the ongoing copyright battle, if only because it shows there is substantial legal basis for the Betamax defence.
E-mail Mathew Ingram at mingram@globeandmail.ca
Look for exclusive Mathew Ingram commentary at GlobeInvestorGold
http://www.globeandmail.com/servlet/story/RTGAM.20030429.wmath429/BNStory/Business