The major U.S. motion picture studios and record companies, as well as a certified class of 27,000 music publishers and songwriters, petitioned the U.S. Supreme Court Oct. 8 for review of the decision

NEW YORK -- The major U.S. motion picture studios and record companies, as well as a certified class of 27,000 music publishers and songwriters, petitioned the U.S. Supreme Court Oct. 8 for review of the decision finding peer-to-peer companies Grokster and StreamCast not liable for secondary copyright infringement (Billboard, Aug. 26. )

The petitioning copyright owners sued Grokster, StreamCast and others in 2001 for copyright infringement based on the companies' P2P file-sharing software. In resolving but one aspect of the case, the federal Ninth Circuit Court of Appeals in San Francisco held on Aug. 19 that Grokster and StreamCast were not liable for contributory or vicarious copyright infringement.

As previously reported by ELW, the parties elected to seek review by the Supreme Court rather than an en banc reconsideration by the Ninth Circuit Court of Appeals.

In their petition, obtained by ELW, the petitioners assert that "this case is one of the most important copyright cases ever to reach this Court. Resolution of the question presented here will largely determine the value, indeed the very significance, of copyright in the digital era."

They also state that the infringement fostered by Grokster and StreamCast is "inflicting catastrophic, multibillion-dollar harm on petitioners that cannot be redressed through lawsuits against the millions of direct infringers using those services."

The petitioners contend that Grokster and StreamCast are not software distributors "in any meaningful sense." They do not sell their software; they make "millions of dollars annually from advertisers seeking to reach the users of these services."

The petition presents the following arguments.

(1) This case raises the critically important question of how secondary copyright liability applies to the nationwide distribution of protected works over the Internet: (a) Liability for secondary copyright infringement has long been imposed under established doctrines that Sony-Betamax reaffirmed; (b) Sony-Betamax also adapted established secondary liability law to the distinctive situation presented by that case; and (c) By misreading Sony-Betamax, the Ninth Circuit's decision turns secondary liability principles on their head.

(2) The Ninth Circuit's decision creates a direct and acknowledged conflict with the Seventh Circuit's decision in Aimster: (a) There is a conflict regarding what is necessary to show commercially significant noninfringing uses; and (b) There is a conflict on the consequences of a showing of substantial noninfringing uses.

(3) Immediate review is urgently needed.

The parties conclude by writing, "For petitioners, everything is on the line." Any further delay "multiplies the irreparable harm that the Ninth Circuit's decision legitimizes. More than 40 million people use peer-to-peer networks, and more than 5 million are on Grokster and StreamCast at any given moment ... Conservative independent estimates of lost music sales alone range from $700 million to several billion dollars annually; adding lost sales for motion pictures raises the aggregate harm to staggering levels."

On Oct. 6, StreamCast announced that, "on the heels of its recent Ninth Circuit appellate court victory," StreamCast NetworksT Inc. unveiled the "latest version of its popular peer-to-peer file-sharing and search application." Developed by a group of Harvard-educated computer scientists, the application was promoted as delivering "the most reliable search results and file accuracy available in today's peer-to-peer universe."

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