Grokster and StreamCast, distributors of peer-to-peer file-sharing software, are not contributorily or vicariously liable for copyright infringements by users, the U.S. Court of Appeals for the Ninth

Grokster and StreamCast, distributors of peer-to-peer file-sharing software, are not contributorily or vicariously liable for copyright infringements by users, the U.S. Court of Appeals for the Ninth Circuit held today (Aug. 19).

Rejecting an appeal by movie studios, record labels, music publishers and other copyright owners, the court affirmed the District Court's granting of partial summary judgments in April 2003.

The RIAA, the National Music Publishers' Assn. and the Motion Picture Assn. of America (MPAA) filed the suit in 2001.

Unlike Napster's first software version, with a centralized index of files, Grokster and StreamCast use "decentralized" P2P models. Both initially used the software developed by KaZaa in which a number of select computers on the network are designated as indexing servers. StreamCast later used a different model, still decentralized.

In a statement, MPAA president/CEO Jack Valenti says, "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. Businesses that ignore their responsibilities as corporate citizens profoundly undermine innovation in both the creative and technological arenas.

"Copyright theft is still illegal, and the Ninth Circuit Court of Appeals reiterated today that users of file-copying networks that illegally traffic in copyrighted music, motion pictures and television programs are not 'sharing,' they are stealing."

RIAA chairman/CEO Mitch Bainwol adds, "Irrespective of what any court says, a debate has crystallized: it's legitimate versus illegitimate. It's iTunes, Rhapsody, the new Napster and Wal-Mart, Amazon, Musicnet, Dell, Sony Connect, Microsoft and others versus the likes of KaZaA, Morpheus and Grokster. It's whether or not digital music will be enjoyed in a fashion that supports the creative process or one that robs it of its future. That's the online future of music."

StreamCast CEO Michael Weiss says, "Not only is today's ruling a hard-fought victory for Morpheus, but this is a win for our fellow P2P developers and a victory for American innovation," says StreamCast's CEO Michael Weiss. "Today's decision paves the way for the release of StreamCast's innovative next-generation P2P software."

Jay Rosenthal, counsel for the Recording Artists Coalition (RAC), which
represents more than 100 established U.S. recording artists, says Congress
must change the current law. "By making the same mistake it made in the
Napster case, the 9th Circuit in Grokster has made it very apparent that only
Congress can rescue them from their intellectual foolishness. Congress must pass the Induce Act, and they must do it now."

The case doesn't end here. The decision is limited to specific software in use at the time of the District Court's decision. The copyright owners also seek relief based on previous versions of the software that contain significant differences from the software considered by this court -- "perhaps crucial" differences, the court noted.

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