File-sharing software firms win legal victory
23 August 2004
A US federal appeal court has ruled that the makers of peer-to-peer software cannot be held responsible for what users do with it.
Music and movie companies in the United States had been hoping to claim damages but the Federal appeals court in San Francisco upheld a ruling by a lower court in Los Angeles that file-sharing software made by Grokster Ltd and StreamCast Networks Inc did not violate US copyright law.
The three judges reportedly voted unanimously in favour of the defendants after the US entertainment industry appealed a previous ruling in favour of the two companies.
Grokster and StreamCast (maker of Morpheus) make their software available for any application users might find appropriate. The court's decision to dismiss the lawsuit was based on the distinction between providing a tool for file-sharing and providing a service.
In the ruling, written by Judge Sidney R Thomas, the court observed that "the software design is of great import . . . it is prudent for courts to exercise caution before restructuring liability theories." The judges drew parallels between older cases which said video recorders should not be banned simply because people used them for illegal copying.
Fred von Lohmann, spokesman for the Electronic Freedom Foundation (EFF), said: "The same principle that people who make crowbars are not responsible for the robberies that may be committed with those crowbars." Mr von Lohmann also represented StreamCast in the case.
Recording Industry Association of America (RIAA) chairman Mitch Bainwol said the decision "does nothing to absolve these businesses from their responsibility ... to address the rampant illegal use of their networks."
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