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Legal Perspective on the Grokster and Napster Rulings

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Chris Sprigman writes on FindLaw:

    On April 25, in M-G-M v. Grokster, U.S. District Judge Stephen Wilson dismissed a copyright infringement lawsuit brought by a group of movie studios and record companies against Grokster and Morpheus.

    ….To see what is likely to occur in the future, it’s helpful first to take a closer look at the differences between Grokster, Morpheus, and Napster.

    First, Grokster. It offers for download a branded version of software owned by Sharman Networks, a company incorporated in Vanuatu – a remote Pacific island chain that markets itself as protecting corporate secrecy.

    When a user boots the software, his computer is directed to sign on to a “root supernode” (a server owned by Sharman), which then directs the user to a “local supernode.” The “local supernode” is some user’s computer, which has been temporarily designated to route file-sharing requests among a large number of other users. (A particular user’s computer may function as a local supernode one day but not the next; the process is largely invisible to the user).

    Suppose a Grokster user requests a certain file – it could be a song, a movie clip, a video game, or an e-book. His search request is relayed among a large number of local supernodes and on to individual users. Once the requested file is found, it is transferred directly between the users.

    Now let’s look at Morpheus. Its software is based on the Gnutella peer-to-peer platform, built from “open source” code. Morpheus users connect to the Gnutella network by contacting another user who is already connected. (This initial connection is usually made by linking to a computer on the network that maintains a constantly changing list of IP addresses for certain currently active nodes.)

    The Gnutella network is a “pure” peer-to-peer network – composed of users running Gnutella-compatible software such as LimeWire, BearShare and Shareaza. It does not use supernodes. Instead, user search requests are passed from user to user in the network until the requested file is found. The file is then transferred directly between the two users.

    ….when Grokster and Morpheus users search for and receive digital files, they do so without information being relayed to or by any computer owned or controlled by Grokster or Morpheus. Thus, as the district court noted, if Grokster or Morpheus shut down, their users could continue to share files with little or no disruption.

    In contrast, Napster users relayed search requests through a central server owned by Napster (the Napster central server also maintained an index of users and files available on the network at any given time).

    ….Hollywood’s future is online. The question now is whether Hollywood’s setback in Grokster will bring that future closer, or push it further off. Stay tuned.

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