July 20, 2000 5:00 PM PDT
Movie studios target Scour with copyright lawsuit
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While the movie studios have weighed in on the record industry's suit against Napster, it's the first time they've filed their own lawsuit against a file-sharing company that allows movie trading online. The Recording Industry Association of America (RIAA) and the National Music Publishers Association (NMPA) joined the Motion Picture Association of America (MPAA) in its suit.
"This lawsuit is about stealing," MPAA president Jack Valenti said in a press conference this morning. "Technology may make stealing easier, but it doesn't make it right."
Scour and its Scour Exchange file-sharing program work much like Napster, allowing individuals to open their own hard drives to trade files. But where Napster limits its members to trading music files, Scour lets people trade movies and other multimedia files.
The lawsuit is sure to send waves through Hollywood. High-profile agent Michael Ovitz, who has represented many of the movie industry's top stars and has helped shift the balance of power between actors and studios, is one of the leading investors in Scour.
The lawsuit also raises the stakes in the legal onslaught being leveled at the growing range of file-sharing companies. Music, because of relatively small file sizes and wide appeal, has been the first medium to be heavily copied and traded online. But Hollywood studios have worried that movies would be next as compression technologies improve and high-speed Internet connections become more popular.
Allegedly based on a hacked version of Microsoft's video-compression software, the technology allows full-length movies of VCR quality or better to be posted online and downloaded in just a few hours. Movies encoded in this format have been circulating through the computer underground since late last year and have increasingly found their way to services such as Scour and Gnutella.
Other copying and compression schemes have also contributed to the spread of pirated movies online. But it's the advent of the file-sharing services that has made this a pressing problem, the industry groups said today.
Valenti said he was able to find 25,000 people online at Scour at the same time he was logged on, as well as more than 100 places to download the new movie "The Perfect Storm" and even more for "Gladiator" and "Mission Impossible 2."
The MPAA has been vigilant in fighting other online companies it contends have violated its members' copyrights. Early this year it was instrumental in closing the online doors of Canadian company iCraveTV.com, which offered a live online feed to broadcast TV stations. It has leveled a similar suit against RecordTV.com, a Los Angeles company that hoped to act as an online VCR.
But its most recent campaign has been against the spread of the DVD-viewing software known as DeCSS. Originally developed as a way for Linux users to play DVDs on their machines, that software proved to be a way to break through the expensive copy-protection controls on ordinary DVDs.
Since then, video files created with the help of DeCSS are allegedly being compressed and distributed online through technologies such as DivX. This issue is still being argued in court, however.
Scour has tried to make connections inside the movie industry, contending that it is a perfect vehicle for the distribution of authorized content and that its full business is in fact legal. It does say on its site that it is not responsible for any copyright violations made by people using its service, but the company gives copyright owners a way to have links to their content taken off the site.
It's also signed deals with several movie studios to distribute movie trailers or promote films on its Web site and file-sharing services.
"We're very surprised about this morning's MPAA and RIAA lawsuit," Scour president Dan Rodrigues said in a statement.
He said that Scour already has licensed content agreements from Miramax Films and Hollywood Records, both plaintiffs in the lawsuit. In addition, he said, the company held licensing talks this week with three of the "Big Five" labels--Sony Music, Warner Music and BMG Entertainment--and it plans to meet soon with Universal Music Group.
"Scour has always positioned itself as a cooperative, responsible and legally compliant partner within the entertainment community," Rodrigues said.
But Scour's efforts at defusing conflict aren't enough, the MPAA says. The organization says it had been in contact with Ovitz over the issue but that no substantial conversations had ever taken place.
"What Scour is doing is aiding and abetting--stealing on the part of others who may not understand that they are stealing," Valenti said, criticizing the notion that free downloads don't hurt anybody. "There are thousands of people depending on these (movie) residuals for their health, welfare and pensions."
The MPAA has not put a final price tag on its suit, but the group says it can ask for actual damages or for statutory damages of $150,000 per movie downloaded. It's also asking for an injunction blocking the trades of any copyrighted material through the service. Scour is the only defendant named in the suit.
The record industry and Napster are scheduled to meet in court next week to hash out whether that company should be shut down pending trial.