>
>
> 3:35 PM PDT, April 25, 2003
>
> E-mail story
>
>
> Print
>
>
>
> UPDATE
> Recording Firms Lose File-Sharing Case
> The ruling is a blow to record
> companies and movie studios who
> seek to stem the illegal copying
> and distribution of their
> copyright works through file
> sharing.
>
> By Jon Healey, Times Staff Writer
>
> The entertainment
> industry suffered a
> major setback today in
> its fight against
> online piracy when a
> federal judge ruled
> that two of the most
> popular sources of
> free music and movies
> on the Internet do not
> violate copyright law.
>
> In a 34-page decision
> that stunned the
> record labels and
> Hollywood studios,
> U.S. District Judge
> Stephen V. Wilson in
> Los Angeles held that
> the Morpheus and
> Grokster file-sharing
> networks are legal
> even though most of
> their users are
> illegally copying the
> labels' and studios'
> works. Unlike the
> now-defunct Napster
> service, Wilson ruled,
> Morpheus and Grokster
> aren't liable for what
> their users do because
> the networks don't
> monitor or control
> them.
>
> Executives at the Motion Picture
> Assn. of America and the
> Recording Industry Assn. of
> America said the ruling was
> legally incorrect and they would
> appeal.
>
> "It is not sharing, it's
> stealing," said Jack Valenti,
> chief executive of the MPAA.
> "And I don't believe any court,
> in the final end, is going to
> condone that. Therefore I feel
> quite confident in the end we
> will prevail because we are
> right."
>
> Still, the ruling leaves the
> record labels with a clear, if
> uncomfortable, option for
> attacking file-sharing, which
> they blame for decimating CD
> sales: suing individual users,
> who just happen to be their
> customers. It also presses the
> labels and studios to increase
> their support for online
> services that charge for music
> and movies they distribute, many
> of which complain about the
> companies' reluctance to embrace
> ground-breaking business models.
>
> In the meantime, the ruling
> could invite more entrepreneurs
> to launch and promote
> file-sharing services, which
> have largely operated in the
> Internet underground.
>
> Wilson agreed with previous
> rulings that consumers don't
> have the right to copy songs and
> movies from each others'
> computers without the copyright
> owners' permission. He also
> acknowledged that Morpheus and
> Grokster may have designed their
> systems to avoid liability while
> deliberately profiting from
> their users' piracy.
>
> But both networks enable
> legitimate copying as well as
> infringements, which entitles
> them to a degree of legal
> protection, Wilson said. And
> because the networks would keep
> operating even if the companies
> stopped supporting them, the law
> against indirect infringement
> doesn't apply, he said.
>
>