October 8, 2004 1:52 PM PDT

Hollywood takes P2P case to Supreme Court

Hollywood studios and record companies on Friday asked the United States Supreme Court to overturn a controversial series of recent court decisions that have kept file-swapping software legal.

The decisions have been among the biggest setbacks for the entertainment industry in the past several years, as they have tried to quell the rampant exchange of copyrighted materials over peer-to-peer networks such as Kazaa and Morpheus.

In a joint petition to the Supreme Court, the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA) said that letting the lower court rulings stand would badly undermine the value of copyrighted work.

"This is one of the most important copyright cases ever to reach this court," the groups said in papers filed with the court. "Resolution of the question presented here will largely determine the value, indeed the very significance, of copyright in the digital era."

The ongoing case has helped define the limits of what is legal for software companies, as the entertainment companies have tried to hold peer-to-peer developers responsible for the widespread copyright infringement of people using their products.

Record labels had made this claim successfully against Napster, which ultimately shut down under the pressure of court-ordered network filters. But a Los Angeles federal judge said Grokster and StreamCast Networks, which distribute software allowing people to trade files without any further intervention by the companies, should not share the same fate.

"Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends," federal Judge Stephen Wilson wrote in his 2003 decision. "Grokster and StreamCast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights."

Wilson's ruling was upheld by the Ninth Circuit Court of Appeals in August.

In their legal briefs, the entertainment industry attorneys said the lower courts' rulings conflict with rulings in the Seventh Circuit against Aimster, another file-swapping company. That court ruled that Aimster was liable for the actions of its users, and ordered the network to be shut down.

The file-swapping companies should have a responsibility to design their products to help counter massive illegal activity, the entertainment companies argued in their legal papers.

"These companies have expressly designed their businesses to avoid all legal liability, with the full knowledge that over 90 percent of the material traversing their applications belongs to someone else," MPAA Chief Executive Dan Glickman said in a statement. "Now is the time for the courts to review these businesses that depend upon violation of copyright."

Technology consumer groups said the lower court's ruling had been right and that the Supreme Court should not accept the case.

"There is no reason the Supreme Court should review the (lower court's) decision," Gigi Sohn, president of Public Knowledge, said in a statement. "That case was based on the principles established in the 1984 Betamax case, which has led to the largest and most profitable period of technological innovation in this country's history. Consumers, industry and our country have all benefited as a result."

15 comments

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Price Fixing
Something needs to be done about the music industrys price-fixing. Its been 20 years and a CD still costs $15! That's just plain wrong!
Posted by ledzep75 (53 comments )
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Simple reason for $15 CDs
Price-fixing is nonsense. There are 2 reasons they cost $15 or more.
First, the record companies start with their (joint?) research on the "optimum" retail price -- what enough people will pay such that the ones unwilling to pay that much don't matter. Then they set a wholesale price high enough to make sure retailers don't get more of a margin than they need to barely survive but without having to charge more than the optimum price determined by the record company.
Second, there is no competing rental channel. The record companies successfully lobbied Congress to prohibit rentals without their consent. DVDs that cost several times more to make than CDs may be sold cheaper for the simple reason that sales are competing with rentals. Rentals are real cheap because if not, people would just buy them. But by eliminating competition between sales and rentals. the record companies compete only with the pirates. (If CDs could be rented, the pirates might not have such an open field.)
Posted by Reflautas (27 comments )
Link Flag
Aimster Preyed on Copyrights
Aimster was very open about sharing files without respect for copyright when they launched. The other companies have not been trying to promote illegal use of their software as Aimster had done. When you ask people to break the law with something you have made, then you deserve to be held responsible for the legal violations of your users.
Posted by zaznet (1138 comments )
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How about good music instead?
I can live with $15 CD's providing they're worth it - I can't
remember the last time I bought a CD that had more than 2
songs on it that I'd listen to and $15 for 2 songs is
ridiculous! Improve the quality of music or live with the file
sharing.
Posted by bwl4art (1 comment )
Reply Link Flag
Why is P2P Thriving?
P2P is thriving because onerous copyright restrictions are stifling human innovation. What began as a way to provide a discrete and reasonable window of opportunity for content creators to obtain financial rewards for their labors has turned into an intellectual monopoly that actually stifles innovation. What's more, as content creators have mustered the resources of the political and judicial system, they are attempting to put a permanent lock on future innovation. The natural order of human innovation is to build on the successes of those who innovated before us. If that earlier innovation is "protected" beyond a certain amount of time, the ability to innovate is seriously diminished. I believe that seven (7) years is more than adequate protection for content creators to exploit their intellectual monopolies. Anything longer is becomes a travesty that leads to the rampant disrespect for all copyright that we are seeing today.
Posted by Willie Winkie (123 comments )
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Case Closed long Ago
The 1984 Betamax case says it all, people. And I have to say, if the music and movie industries want to stop P2P creativity, or the creation of the softwares all together, they should also ask the Supreme Court while they're at it, to look into two simple things - don' have time to get into the complicated: 1- the INTERNET. Some call it the WEB - I just call it The Prostitute of the 21st century (no preferences whatsoever on who logs on, bag or good). Shut her down!;) 2- The second immediate guilty party is the hard drive, AKA Mr. C:\ or the P.I.M.P. (Banker) of the internet. So, companies that find ways and have the means to make the internet faster, and those that make huge drives are the very first guilty parties to shut down!;)
Posted by jacdor90 (50 comments )
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Hollywood Does Not Own The Internet
This sounds more like an attempt by Hollywood to own technology that doesn't even belong to them except in a fantasy world that is always created whenever they make a movie.

Mixing fantasy and real life simply doesn't work, boys. Get it straight.
Posted by WarpKat (23 comments )
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Re: Hollywood Does Not Own The Internet
BUT it's trying to.

Give their legal beagles a few years longer and they will.
Posted by royc (78 comments )
Link Flag
Greedy, Greedy, Greedy
I think that the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA) are entitled to take this to the supreme court if they want to. Personally though, think that they are just greedy and want to keep the reigns tight around what they own and such.

Honestly, I am not expecting the Supreme Court to rule differently than the lower courts. The lower courts had a good point about how other products like Xerox are not band from selling copy machines just because they can be used and are used illegally when it comes to copyright laws.

<a class="jive-link-external" href="http://allwaysmusic.modblog.com/" target="_newWindow">http://allwaysmusic.modblog.com/</a>
Posted by (59 comments )
Reply Link Flag
P2P Ruling
I believe that P2P should be legal. Copying/Sharring should be legal as well.

If you are not trying to copy for profit there shouldn't be any restrictions. In fact, statistics have proven that file sharring has not slowed down the sale of music, rather it has promoted greater sales.

What about the cassette?
What about VHS?

It didn't affect those!

Thanks for the voice.

Boogs
Posted by Boogs (2 comments )
Reply Link Flag
Did public libraries kill publishing?
Did public libraries kill publishing? No. Why should anyone ever buy a book when they can borrow it from the library for free? So they can posess a tangible thing, and call it their own. So they can collect things they enjoy. Why buy recordings when there are free MP3s on the internet? Same reasons. Screaming teen girls can't get pics of the latest boy band, lyrics lists, or other such tangible things to show off in front of friends from a download. Piracy is a paper tiger. MP3s are not killing the recording industry. Radio is also free to the end user, and did not kill the recording industry either. It made the recording industry.
Posted by Uncoveror (13 comments )
Link Flag
Hollywood takes P2P to Court
Its not so much about copyright as it is about Control the Entertainment Industry wants to control how you access and how you use their. Sale of their product is a misnomer in actual fact you are renting or leasing their product and they will continue to control How, where and when you enjoy the product. The best way for the consumer to regain any control in this relationship is to sever the relationship. Don't Buy, lease or rent their product until they remove the restrictions and cease this insane lobbying and ill conceived litigation.

You have the ultimate control, all you have to do is control yourself, their product is not a necessity, spend your rntertainment dollars somewhere else. When their revenue drys up, they'll get the message.
Posted by Flicker1947 (2 comments )
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Legally responsible?
If "The file-swapping companies should have a responsibility to design their products to help counter massive illegal activity, the entertainment companies argued in their legal papers." is true, ... then we can start suing firearms manufacturers for illegal use of the weapons they create. What would the NRA think of this? In a shootout who would win? RIAA or NRA?
Posted by (4 comments )
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