US Appeals Court Mulls File Swap Ruling

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

04 February 2004

The 9th US Circuit Court of Appeals on Tuesday began its review of a lower court ruling which stated that peer-to-peer file sharing services, Grokster and Morpheus cannot be held responsible if internet users use their software for illegal purposes.

Ruling in favour of the file swapping services in April 2003, Judge Stephen Wilson pointed to the differences between the services offered by the now defunct Napster, which hosted directories of users' files on its servers, and those offered by Grokster and Morpheus' parent company, Streamcast, which provide software allowing users to share files, and offer technical assistance, but have no way of controlling the use to which the software is put.

In a 34 page ruling, he observed that: 'Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends.' He added that: '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.'

However, representatives of the US film and music industries have disputed this reading of the situation, arguing that the "substantial non-infringing defence" does not apply if the makers of the software or technology in question are aware that their product is being used illegally.

Speaking to CNET News, attorney for the Motion Picture Association of America (MPAA), David Kendall observed that:

"We believe [Grokster and Streamcast] are operating just like Napster and fall under the Napster ruling that the court handed down three years ago."

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