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Key Online Music Piracy Ruling Reviewed

A federal appeals court Tuesday heard arguments in an entertainment industry appeal of a case that may decide the fate of file sharing on the Internet.

The Ninth Circuit Court of Appeals in Pasadena reviewed the appeal of a lower court's ruling that cleared file-swapping services Grokster and Morpheus of copyright infringements occurring on their networks.

The appeal stems from a suit filed in 2001. The Motion Picture Association of America (MPAA), National Music Publishers Association of America (NMPA) and the Recording Industry Association (RIAA) sued Kazaa, Grokster and Streamcast Networks, owner of Morpheus, for contributory and vicarious copyright infringement. In April 2002, the court ruled in favor of Grokster and Streamcast. The claims against Kazaa and its acquirer, Sharman Networks, were separated from this suit and are still pending.

In his decision in that Los Angeles district court case, Judge Stephen Wilson wrote, "Just as in Napster, many of those who use (Grokster and Morpheus) software do so to download copyrighted media files, including those owned by the plaintiffs and thereby infringe Plaintiffs' rights of reproduction and distribution. Thus, for purposes of these motions, plaintiffs have established direct infringement of their copyrighted works by some end-users of Defendants' software."

However, Wilson was guided by a landmark 1984 Supreme Court ruling that said use of new technology to infringe copyrights did not justify an outright ban on that technology. Wilson said Grokster and Morpheus couldn't control how people use their software.

Brian O'Neal, a spokesperson for Streamcast Networks, said that the Morpheus software is very useful for distributing a wide variety of legal material.

For example, he said, someone may have generated material he'd like to share, perhaps about a hobby, but not know how to build a Web site. "[With Morpheus], he could choose to put it in a shared directory that's safe and secure. This concept of distributed computing is far more efficient [than the central file server model] -- you don't rely on the power of a gatekeeper."

No executives from the RIAA, NMPA or MPAA were available for comment. A statement released by the MPAA said, "This case is not about Plaintiffs embracing or opposing technological innovation. It is about the conduct of businesses that intentionally misuse commonly available Internet 'peer-to-peer' technology to profit from copyrights they do not own for works they did not create."

The industry associations argue that, since Grokster and Morpheus block some files, such as viruses, they can and should block illegally shared files as well.

Adam Eisgrau, executive director of P2P United, a lobbying organization for file-sharing software vendors, said that statement is deliberately misleading, because filtering for pornography or other material is set up by individuals on their own computers.

"It's not dynamic software that on its own scours the content that people send back and forth," he said. "It's not centralized."

The P2P claque is feeling confident. Said Wayne Rosso, the former president of Grokster who's now CEO of file-sharing networks Blubster and Piolet, "Every judge in the world seems to understand our technology and how the law applies to it -- except for the RIAA and the movie industry. ...These guys can cry all they want to, but they're going to have to adjust to this brave new world."

Unfortunately, it's not over till it's over. P2P United's Eisgrau said the record industry is already lobbying congress to pass legislation to stop file sharing. And that would be a shame, he said. "Letting the law become the instrument of one parochial organization is really bad policy."