Supreme Court hits file-sharing networks hard

The Supreme Court dealt what could be the deathblow to companies that facilitate illegal file… The Supreme Court dealt what could be the deathblow to companies that facilitate illegal file sharing Monday.

In a unanimous decision, the court declared, “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

The court ruled to return the case to a lower court, where a federal district judge had previously granted judgment without trial to the file-sharing providers.

In the lower court, the file-sharing companies will now have to prove that they did not promote copyright infringement.

“We will continue our David vs. Goliath fight to prove that we operate 100 percent on the right side of the law,” said Michael Weiss, the CEO of StreamCast Networks’ Morpheus — one of two major file-sharing programs identified in the lawsuit — on his company’s Web site.

“Once all the evidence is put forward, we are confident that it will be proven that Morpheus did not, does not and will not promote or encourage copyright infringement,” he added.

The decision bolsters the entertainment industry’s attack on file sharing by extending its grasp from the individuals who exchange copyrighted materials to the companies who provide networks for illegal file sharing.

Last April, the Recording Industry Association of America unleashed a wave of lawsuits against 405 file sharers, including 16 people on Pitt accounts. Then in May, the RIAA added 91 more students to its list of people under litigation.

Mitch Bainwol, the RIAA’s chairman and CEO, joined the president and CEO of the Motion Picture Association of America, Dan Glickman, for a press conference in response to the Supreme Court’s ruling.

“We’ve had a tough few years. Today is not a panacea,” Bainwol said. “The winners are the creators and their fans.”

Bainwol encouraged the companies who create file-sharing programs to work with the entertainment industry in the future.

Glickman echoed that sentiment.

“We believe this decision will help power the digital age by protecting the free market and by promoting innovation, both technological innovation as well as creative innovation,” he said.

Bainwol said that though the case focused more directly on the people who provide systems for file sharing, the individual swappers should not feel that they are free from RIAA’s watchful eye.

“In a perfect world, folks would respond to this decision in an appropriate way and they’d move to the legitimate alternatives,” Bainwol said. “For those who choose to engage in illegal acquisition of music, they will still face some deterrence.”

Ted Olsen, a former solicitor general and recent supporter of the RIAA’s and MPAA’s arguments, also spoke at the press conference.

“The framers of our constitution knew that we would not have creativity, we would not have innovation in our country, unless we protected the innovator and gave the innovator and the creator an incentive to create something that we might all enjoy,” Olsen said.

Glickman seemed invigorated by the unanimity of the court’s decision.

“If you build a business that aids and abets theft, you will be held accountable,” he said. “The Supreme Court gave us common-sense rules for the road, based on hundreds of years of common law.”

The case positioned a group of movie studios against Grokster, Ltd., and StreamCast Networks, Inc., two companies that distributed free software that allowed computer users to share files through peer-to-peer networks.

The crux of the argument from the defense was that since the companies did not store or distribute files from any central computer, they could not be held accountable for illegal activity that took place as a result of their software.

The Supreme Court, however, found that the defendants were aware that users employed their software primarily to download copyrighted files, and that the companies took active steps to encourage infringement.

The Supreme Court made a distinction between this case and one from 1984 that dealt with similar issues, involving the videocassette recorder.

In the ’80s, the court ruled that the Sony Corp. could not be held responsible for cases of copyright infringement connected to VCR because Sony distributed the device with the intent that it be used for non-infringement purposes.

In the Grokster case, the court determined that the file-sharing companies crossed the boundary of legal activity by distributing a service designed and promoted as a tool for copyright infringement.