WASHINGTON, D.C. — The owners and operators of the Grokster peer-to-peer network — the lead and most well-known defendant in one of the Supreme Court’s seminal decision this year — agreed Nov. 7 to shut down operations to settle the piracy case with the nation’s major record companies, motion picture studios and music publishers.
The settlement includes a permanent injunction prohibiting infringement — directly or indirectly — of any of the plaintiffs’ copyrighted works. This includes ceasing immediately distribution of the Grokster client application and ceasing to operate the Grokster system and software. An RIAA spokesperson also said Grokster is to pay the plaintiff companies $50 million in damages.
A consent judgment was submitted to the U.S. District Court for the Central District of California Nov. 7 for approval.
Coming just four months after the Supreme Court’s ruling in MGM Studios vs. Grokster — and on the heels of a rapid succession of similar international rulings in Korea, Australia and Taiwan — the music industry hailed the settlement as an important milestone in the continuing transformation of the online marketplace.
“This settlement brings to a close an incredibly significant chapter in the story of digital music,” said Mitch Bainwol, chairman/CEO of the RIAA. “This is a chapter that ends on a high note for the recording industry, the tech community and music fans and consumers everywhere. At the end of the day, this is about our ability to invest in new music. An online marketplace populated by legitimate services allows us to do just that.”
“The Grokster verdict has spurred growth and innovation for legal music services, including a legitimate peer-to-peer market,” said David Israelite, CEO/president of the National Music Publishers Assn. “Now that a legal online entertainment environment has been established, the ultimate winners in the Grokster case are the music fans, who now have more options than ever before to hear the music they love.”