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Supreme Court Marketing Event for P2P

UPDATED: While the U.S. Supreme Court prepares its ruling on the MGM vs. Grokster and StreamCast file-sharing case, two peer-to-peer software companies are using the impending decision as a marketing hook.

On Monday, ByteTaxi released an application it hopes will replace the stigma of file sharing with business-class credibility.

StreamCast Networks, a party in the Supreme Court case, followed with the beta release of its Morpheus 5.0 software for swapping media files.

ByteTaxi's FolderShare is a service aimed at individuals and small businesses, allowing them to securely share and automatically synchronize folders between computers and network devices.

"It's a setup and forget kind of product," said Michael Merhej, CEO of ByteTaxi. "You set it up on the PCs you want to synchronize, then the satellite runs in the background and waits for changes or updates, then automatically synchs them with your other connected devices."

FolderShare customers get private, remote access to files via a Web browser. Version 2.5 adds multi-platform support, so that users of the Windows and Mac OS X operating systems can share and synch files; the company hopes to add support for computers and servers running Linux by the end of the year.

When a shared file is created, changed or deleted, FolderShare uses peer-to-peer (P2P) techniques to make sure that every device sharing the file has the latest copy. To keep from bogging down network connections, the new version transmits only the changed parts of a file rather than the whole thing. File transfers are secured with 256-bit encryption.

The service integrates with Google Desktop Search, so users can use the search application to troll through files on all machines in the FolderShare network with a single query.

FolderShare 2.5 lets users synch files stored on Iomega Network Hard Drives, as well, and the company will get distribution via bundling with new Iomega drives.

"The Iomega deal gives us a retail presence, and [the application] will be running on the hard drive [when it's turned on]," Merhej said. The company is looking for other bundling deals, with broadband router manufacturers, for example.

The three-year-old company, based in Austin, Tex., priced individual licenses at $49.95 per year to attract small businesses and sole proprietors. The license allows sharing between an unlimited number of computers.

Merhej knows P2P: He was president of Audiogalaxy, a music-sharing P2P service that shut down following a copyright infringement suit by the Recording Industry Association of America. He promised P2P technology will transform communication and collaboration -- no matter which way the Supreme Court rules.

Los Angeles-based StreamCast was cleared of copyright infringement in a 2003 suit filed in U.S. District Court; it won again on appeal. The Supreme Court heard oral arguments on March 29 2005.

While the Morpheus software was designed to enable P2P sharing of media files, StreamCast spokesman Brian O'Neal said the company had rebuilt the software to allow users to pay for downloads via an electronic wallet.

The beta Morpheus 5.0 incorporates BitTorrent-based directory searching and anti-spoofing lookups; users can bring their anti-virus software to bear on Morpheus to avoid downloading malware. The company plans to include iPod compatibility, Podcast searches and a mobile version.

A negative decision could theoretically bring the company down: Damage awards could bankrupt it, while a ruling that its product contributed to infringement could preclude further distribution.

But CEO Michael Weiss is anticipating a favorable ruling -- and, perhaps, eventual cooperation with the entertainment industry. In a statement, he said, "While some in the entertainment industry may view our powerful new technology as an even greater threat, we believe that Morpheus can prove to be one of the shining stars for their digital future if only they would be open-minded to work with us. Together we can find solutions a lot quicker than their attorneys ever will."

Updates prior version to include Weiss's comments