News Massive: Grokster and Morpheus Not Liable

This just in:

In a case that could turn the tide on online piracy, a Los Angeles judge ruled Friday in favor of online file-sharing services Grokster and Morpheus, saying the two companies are not liable for online piracy by users of their service. The follow-on services to Napster — which was forced to give up sharing of music files — were sued by several major entertainment companies who sought to take the firms to trial. But U.S. District Court Judge Stephen Wilson ruled in favor of the two firms. A third online file sharing service, Kazaa, is not affected by the ruling.

Wilson said that Grokster and Streamcast were no different from the cases in which Sony developed videotaping that could precipitate illegal copying of films. Sony was sued by Hollywood studios in 1984.

Wilson wrote that in the Sony case, "sales of videocassette recorders did not subject Sony to contributory copyright liability, even though Sony knew as a general matter that the machines could be used, and were being used, to infringe the plaintiffs' copyrighted works." [CBS Marketwatch]

Background on the case here, here, here, here, and here.

What an odd 24 hour period: two huge copyright cases, two seemingly contradictory rulings.

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From CNET:

"Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends," Wilson wrote in his opinion, released Friday. "Grokster and Streamcast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights."

....the ruling appeared to state clearly that decentralized peer-to-peer software such as Gnutella is legal, in much the same way that the Sony videocasette recorder is protected by law.

Representatives of the Recording Industry Association of America and the Motion Picture Association of America could not immediately be reached for comment. They are expected to appeal immediately, however.

"This is far from over," said Fred von Lohmann, an Electronic Frontier Foundation attorney who has represented Streamcast in the case. "This is not the end, but it sends a very strong message to the technology community that the court understands the risk to innovation."

Here is the ruling:

CONCLUSION
The Court is not blind to the possibility that Defendants may have intentionally structured their businesses to avoid secondary liability for copyright infringement, while benefitting financially from the illicit draw of their wares. While the Court need not decide whether steps could be taken to reduce the susceptibility of such software to unlawful use, assuming such steps could be taken additional legislative guidance may be well-counseled. To justify a judicial remedy, however, Plaintiffs invite this Court to expand. existing copyright law beyond its well-drawn boundaries. As the Supreme Court has observed, courts must tread lightly in circumstances such as these:
The judiciary' s reluctance to expand the protections afforded by the copyright without explicit legislative guidance is a recurring theme. Bound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the raised permutations of competing interests that are inevitably implicated by such new technology.
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Article Author: Eric Olsen

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