This Week's Stories: Amicis file briefs in Grokster case; Ticketmaster sued over trade secrets; No end to Napster litigation; Court throws out ACNielsen suit; ASCAP sues businesses; FCC won't seek Sup

This Week's Stories:

Amicis Brief Filing Begins In Grokster Case

By Susan Butler and Bill Holland

NEW YORK -- The Department of Justice is weighing in with the most powerful copyright champions in Congress by filing amicis briefs in the MGM Studios v. Grokster case pending before the Supreme Court.

Acting Solicitor General Paul D. Clement and -- in an unusual action by members of Congress -- Sens. Orrin G. Hatch, R-Utah, and Patrick J. Leahy, D-Vt., filed their "friend of the court" briefs Jan. 24.

The Ninth Circuit Court of Appeals recently ruled in favor of P2P networks Grokster and StreamCast, holding them not liable for secondary copyright infringement for their decentralized versions of the software, and against major motion picture studios, labels and a certified class of about 27,000 publishers and songwriters.

More than 50 groups filed about 20 amicus briefs either supporting the entertainment industry's position or taking a neutral stand, requesting clarification. Those who filed the briefs include the Business Software Alliance (representing commercial software developers such as Microsoft and Apple), the International Federation of the Phonographic Industry and a slew of artists.

The responding briefs of Grokster and StreamCast, as well as amicis briefs supporting the appellate decision, are due to be filed with the court on Feb. 28.

While only the parties to the suit may have an attorney argue before the Supreme Court on March 29, legal sources say the Solicitor General, whose brief urges the Court to reverse the appellate decision, will most likely be allowed to argue on behalf of the federal government as well.

Among others that filed briefs are Kids First Coalition, the Recording Academy, the National Assn. of Recording Merchandisers, the National Broadcasters Assn. and 40 State Attorneys General.

Oral arguments are set for March 29.

Ticketmaster Sued Over Trade Secrets

By Ray Waddell

NASHVILLE -- Delaware-based company Ticket Innovations, d.b.a. Season Ticket Solutions (STS), has filed a multimillion-dollar lawsuit against Ticketmaster, citing breach of a non-disclosure agreement and misappropriation of trade secrets.

The suit, filed Jan. 13 in Los Angeles County Superior Court, alleges that Ticketmaster used confidential information, gathered in 2001 when it was conducting due diligence for a proposed $12.5 million purchase of STS, to create competing products shortly thereafter. The suit also alleges breach of a non-disclosure agreement and misappropriation of trade secrets.

STS says it invested millions of dollars and three years in developing its STS Exchange and STS Group software for sports teams, venues and others to distribute, manage and market season tickets online.

The suit says that after notifying STS that the purchase would not take place, Ticketmaster announced its TeamExchange and GroupManager services, which the suit claims were nearly identical to STS Exchange and STS Group.

STS also contends that Ticketmaster interfered in its relationship with the National Hockey League, as well as with other professional sports leagues and teams, which had expressed interest in licensing STS software but ceased negotiations at Ticketmaster's request.

The suit seeks actual damages of $12.5 million plus the amount by which Ticketmaster was unjustly enriched and punitive damages.

Ticketmaster representatives could not be reached for comment, but the company typically does not comment on pending lawsuits.

No End To Court Action Over Original Napster

By Susan Butler

NEW YORK -- More than five years after the original Napster was quietly launched as the first peer-to-peer network, it continues to resound in costly and complicated ways for the music industry.

One party still caught in the whirlwind is Bertelsmann AG. The company agreed in January to pay $50,000 to publisher Bridgeport Music, settling a copyright infringement action over the German media company's financial dealings with the defunct Napster.

The Bridgeport lawsuit is one of four federal District Court suits filed in 2003 against Bertelsmann in New York. The suits were consolidated and sent to the District Court in San Francisco -- where an earlier suit against Napster was heard -- for all pretrial proceedings.

Plaintiffs in the other suits are Universal Music Group entities, EMI's North American labels and a class of about 27,000 publishers represented by the Harry Fox Agency.

Deposition notices are now flying, sources say. Up to 100 depositions may be taken around the world.

Bridgeport's lawyer, Richard Busch of Nashville, says the small company settled because it could not afford to be part of such a huge undertaking.

Bertelsmann's attorney, R. Bruce Rich with Weil Gotshal & Manges in New York, notes that the prevailing party in copyright infringement suits is normally entitled to recovery of its attorney's fees. "In our estimation," he says, "Bridgeport recognized the ultimate futility in carrying on a meritless lawsuit."

Court Throws Out Case Against VNU's ACNielsen Unit

By Christopher Borowski

(Reuters) -- A U.S. District Court dismissed a long-running anti-trust case against VNU's market research company ACNielsen, brought by its U.S. rival Information Resources Inc., the Dutch publisher said on Jan. 28.

IRI, whose InfoScan system had made some inroads competing with ACNielsen's dominant, audit-based system in the retail tracking market, launched its legal battle in 1996. It accused the larger rival of unlawful bundling of services, signing exclusionary deals with retailers and predatory pricing.

VNU, which acquired ACNielsen in 2001, has always said that the charges were without merit.

IRI, in a separate statement, said it would appeal against the current ruling, seeking an expedited review by the Second Circuit Court of Appeals.

VNU is the parent company of Billboard, Entertainment Law Weekly, The Hollywood Reporter and other trade journals.

ASCAP Sues Unlicensed Businesses

By Susan Butler

NEW YORK -- ASCAP continued its enforcement efforts by filing 24 separate copyright-infringement lawsuits Jan. 22 against nightclubs, bars and restaurants in 15 states and the District of Columbia.

The venues performed ASCAP repertoire without receiving permission to do so by obtaining a license, the rights body says.

The simultaneous filing by the performing rights organization is an attempt to avoid local claims that the corporate organization is picking on an individual owner and to show that ASCAP will enforce the rights of its members, says Vincent Candilora, senior VP of licensing.

ASCAP notes that during 2004, it achieved a 100% success rate with its copyright infringement litigation, with all concluded cases resulting in either a cash settlement or a judgment in favor of ASCAP members.

FCC Won't Seek Supreme Court Review Of Media Ownership Decision

By Jeremy Pelofsky

WASHINGTON, D.C. (Reuters) -- The Bush administration has decided against filing a petition with the U.S. Supreme Court requesting review of a ruling that prevents media conglomerates from expanding their reach in U.S. media markets, U.S. officials said Jan. 27.

Even though the Federal Communications Commission had sought to relax the limits, the administration feared a review could risk a decision that would wipe all its media ownership limits off the books, one FCC official said, declining identification.

The FCC in 2003 eased media ownership restrictions, lifting a ban on companies in medium and large markets allowing them to own a newspaper and some television stations and radio outlets in a single market. The agency also agreed to let broadcasters own two or three TV stations in the bigger media markets.

The U.S. Court of Appeals for the Third Circuit decided last year that the agency's justification for the new limits was insufficient and put the rules on hold until the FCC addressed the court's concerns.

Tribune Co., which owns television stations and newspapers and hopes to acquire more, will file its own petition, as will the National Association of Broadcasters, which represents television affiliates and radio stations.

"The 2003 FCC decision clearly established relief in major markets," said Shaun Sheehan, a lobbyist for Tribune. "The Third Circuit is holding the industry hostage. We feel compelled to seek review by the Supreme Court."

Tribune wants the ban lifted on cross-ownership of newspapers, television stations and radio outlets in a market.

FCC Chairman Michael Powell and media companies had argued that the proliferation of new sources of entertainment and information, such as the Internet, cable television and satellite services, justified relaxing the limits.

Lawmakers, consumer advocates and political groups have objected to looser limits, arguing that diverse viewpoints would be harder to voice, investigative reporting would suffer and local news coverage would dwindle.

The FCC also had tried to permit television networks to own more stations, collectively reaching 45 percent of the national audience, up from 35 percent. But Congress overruled the FCC and set it permanently at 39 percent.

Both Viacom Inc.'s CBS network and News Corp.'s Fox network are close to that limit.

RIAA Files New Round Of Suits

By Bill Holland

WASHINGTON, D.C. -- The Recording Industry Assn. of America on Jan. 27 sued 717 illegal file sharers for copyright infringement through illegal downloading on the Internet.

The number of university network users targeted in the new suits is nearly three times the number sued in recent rounds, signaling a continuing effort to step up anti-piracy enforcement on college campuses.

Among those sued in the "John Doe" lawsuits are 68 users of computer networks at 23 schools, including Georgetown University, the University of Massachusetts (Lowell), Harvard University Medical School and Virginia Commonwealth University.

The suits cite the individuals for illegally distributing copyrighted music on the Internet via unauthorized peer-to-peer services such as KaZaa, eDonkey and Limewire.

MPAA Launches More Suits

By Susan Butler

NEW YORK -- The major motion picture studios and a group of independent film distributors filed a second round of federal lawsuits Jan. 26 against unauthorized peer-to-peer users in the United States, according to the Motion Picture Assn. of America.

The first round, filed in November, resulted in many defendants seeking to settle the claims rather than litigate, the trade group says.

Meanwhile, the MPAA on Jan. 26 launched Parent File Scan, software that helps consumers check whether their own computers have P2P software and potentially infringing copies of movies and other copyrighted material on their systems. Consumers can then delete the material without any information about the material being transmitted to the MPAA or any other organization.

Judge Upholds Disney Win In Pooh Case

By Jesse Hiestand

(The Hollywood Reporter) -- The Walt Disney Co.'s victory in the long-running "Winnie the Pooh" lawsuit was reaffirmed by the trial judge Jan. 26, setting the stage for plaintiff Stephen Slesinger Inc. to appeal.

The nearly 14-year-old case was dismissed in March when Los Angeles Superior Court Judge Charles McCoy Jr. ruled that the plaintiffs systematically stole and altered Disney documents to gain an unfair advantage at trial.

The surprise ruling led the Slesingers, who claimed they were cheated out of hundreds of millions in Pooh royalties, to accuse McCoy of being biased in Disney's favor. An outside review by another judge found no wrongdoing and, in a ruling Jan. 26, McCoy denied the Slesingers' request for a new trial.