File Sharing Firms Not Liable For Copyright Infringement, Rules Appeals Court

by Glen Shapiro, LawAndTax-News.com, New York

23 August 2004

Supporting a ruling delivered by a lower court last April, the 9th US Circuit Court of Appeals in Los Angeles on Thursday announced that the providers of file sharing services such as Kazaa, Grokster and Morpheus are not liable for the copyright infringing activities of their customers, provided that they were not directly able to stop the acts in question.

"The (record labels and film industry) urge a re-examination in the law in the light of what they believe to be the proper public policy. Doubtless taking that step would satisfy the copyright owners' immediate economic aims. However, it would also alter general copyright law in profound ways with unknown ultimate consequences outside the present context," the court explained in its verdict.

According to a CNET News report, CEO of the Motion Pictures Association of America, Jack Valenti responded to Thursday's ruling by stressing that the appeals court had not made peer-to-peer file trading itself illegal.

"Today's decision should not be viewed as a green light for companies or individuals seeking to build businesses that prey on copyright holders' intellectual property," he announced, continuing:

"Businesses that ignore their responsibilities as corporate citizens profoundly undermine innovation in both the creative and technological arenas."

Meanwhile, Nikki Hemming, CEO of Sharman Networks, which distributes Kazaa called the ruling "a fantastic result for the peer-to-peer community", and urged the entertainment industry to "stop litigating and start partnering with us. Legislation is not the answer, commercialization of P2P is".

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