Supreme Court: File-Sharing Services May Be Sued

[JackSpratts]

Court: File-Sharing Services May Be Sued
Hope Yen

Internet file-sharing services will be held responsible if they intend for their customers to use software primarily to swap songs and movies illegally, the Supreme Court ruled Monday, rejecting warnings that the lawsuits will stunt growth of cool tech gadgets such as the next iPod.

The unanimous decision sends the case back to lower court, which had ruled in favor of file-sharing services Grokster Ltd. and StreamCast Networks Inc. on the grounds that the companies couldn't be sued. The justices said there was enough evidence of unlawful intent for the case to go to trial.

File-sharing services shouldn't get a free pass on bad behavior, justices said.

"We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties," Justice David H. Souter wrote for the court.

At issue was whether the file-sharing services should be held liable even if they have no direct control over what millions of online users are doing with the software they provide for free. As much as 90 percent of songs and movies copied on the file-sharing networks are downloaded illegally, according to music industry filings.

The entertainment industry said it needed protection against the billions of dollars in revenue they lose to illegal swapping. Consumer groups worried that expanded liability will stifle the technology revolution of the last two decades that brought video cassette recorders, MP3 players and Apple's iPod.

Companies will have to pay music and movie artists for up to billions in losses if they are found to have promoted illegal downloading.

Two lower courts previously sided with Grokster without holding a trial. They each based their decisions on the 1984 Supreme Court ruling that Sony Corp. could not be sued over consumers who used its VCRs to make illegal copies of movies.

The lower courts reasoned that, like VCRs, the file- sharing software can be used for "substantial" legal purposes, such as giving away free songs, free software or government documents. They also said the file-sharing services were not legally responsible because they don't have central servers pointing users to copyright material.

But in Monday's ruling, Souter said lower courts could find the file-sharing services responsible by examining factors such as how companies marketed the product or whether they took easily available steps to reduce infringing uses.

"There is substantial evidence in MGM's favor on all elements of inducement," Souter wrote.
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[DeadMan]

Although a huge blow. I really can't see it making a big difference really. All I see is that companies that 'promote' such services or devices as copyright infringing will be subject to being sued. They will now have to have pretty big disclaimers on them before you install. IMO getting rid of the payware/adware/spyware/spam infected services is a good thing. Let free filesharing continue. I'd love to see Apple get sued over it's iPod of course. But I can't see that happening to be honest. It's the small guy that gets hurt the most of course. But that's America all over. Protect the strong. Kick the weak to the floor and trample all over them.

God bless America!

[Mazer]

You're correct DeadMan, the ruling only seems to apply to companies that profit from filesharing, especially the ones that promote copyright infringement. These companies probably can't be charged in criminal courts, but this decision opens up lawsuits in civil courts. From a legislative point of view this has two effects: first the INDUCE Act which was defeated in Congress last year is now effectively case law (minus criminal liability) so there's no reason for Congress to consider a similar law in the future, and second the DMCA Reform Act (HR 1201) must be enacted in order to protect the Betamax defense, since today's court decision only weakens that precedent.

[Drakonix]

Not much news, really. The key part is "if they intend for their customers to use software primarily to swap songs and movies illegally". Intention is often hard to prove in the absence of documented supporting evidence.

It's back to BetaMax and whether or not there is a "non-infringing use". Definately the DMCA Reform Act needs to be passed to ensure consumers continue to have "fair use" rights. Digital media is here to stay whether or not the industry likes it.

I still think the recording/movie industry may find it difficult to prove the level of damages they claim to have sustained from file sharing. This is especially true given the fact that many boycott the industry for it's draconian treatment of it's own customers. People can live without purchasing CD's and DVD's or going to the movies, but the involved industries can not survive without patronage.

Edit: latent typo, word left out

[ranger121]

Originally Posted by Drakonix

I still think the recording/movie industry may find it difficult to prove the level of damages they claim to have sustained from file sharing.

Right. It seems the music industry constantly exaggerates the effects of file sharing on their profits. Maybe they ought to look elsewhere first..

http://news.bbc.co.uk/1/hi/entertain...ic/4124252.stm

[Nicobie]

I say share hard drives via snail mail and let the fucking riaa sue the god damn Post Office.

[Nicobie]

the riaa