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Thu, Aug 21, 2003 - Page 12 News List

Entertainment firms argue court ruling ignored precedents


A group of entertainment companies have asked a federal appeals court to overturn a landmark court decision that short-circuited their efforts to sue two computer file-sharing software distributors for the illegal online swapping of songs and movies by their users.

In a sealed brief submitted late Monday to the 9th US Circuit Court of Appeals, the companies argued that federal Judge Stephen Wilson departed from well-established copyright law when he ruled in April that Grokster Ltd and StreamCast Networks Inc could not be held liable for their users' copyright violations.

Grokster distributes file-sharing software by that name, and StreamCast distributes Morpheus. The entertainment companies sued StreamCast and Grokster in October 2001.

"The District Court decision sharply departed from the law of the 9th Circuit and dramatically redrew the law of secondary infringement to set near impossible standards for liability in an online environment," the companies said in a brief by the Motion Picture Association of America and the Recording Industry Association of America.

On Tuesday, the groups made excerpts of the brief public.

While Wilson did acknowledge Grokster and StreamCast might have intentionally structured their businesses to avoid liability while still profiting from the illicit use of their software, he concluded there was no evidence the companies could supervise and control the use of their services.

"This case ... 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 brief said.

The entertainment companies also argued that Wilson's decision "makes a mockery of copyright law" because it allows someone to form a company that profits off copyright infringement without any consequences.

"These are businesses that were built for the exclusive reason of illegally exchanging copyrighted works and they make money hand over fist from it," RIAA President Cary Sherman said. "The Court of Appeals should hold them accountable."

Michael Weiss, CEO of StreamCast Networks, said the main issue is whether file-sharing developers should be held liable for providing a product that has many useful applications simply because some people misuse it.

"We expect to prevail and if we do not, we will take this to the Supreme Court if we must," Weiss said.

Wayne Rosso, Grokster's president, expressed confidence that Wilson's ruling would be upheld.

"We clearly have the law on our side, something the plaintiffs obviously have a difficult time accepting," Rosso said.

The major recording companies and movie studios say the illegal swapping of their copyright works threatens their industries and hurts their employees. Both have engaged in public education campaigns and copyright lawsuits to stem piracy, particularly over the Internet.

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