July 3, 2002 11:40 AM PDT

Record labels mull suits against file-traders

Record labels hell-bent on strangling unauthorized music copying on the Internet are considering widening their legal efforts to include lawsuits against individuals, according to industry sources.

The move comes as the industry wrestles to contain the effects of peer-to-peer software applications that allow consumers to link their PCs into massive cooperatives where millions of music titles can be found and copied for free. Despite legal rulings that have helped the labels shut down some of the most popular providers of file-swapping services, such as Napster, such networks have grown unabated.

The labels have not yet decided to sue individuals, industry insiders said. However, it's clear executives are seeking a way to make consumers think twice before uploading or downloading music via the Net. They're also discussing funding a larger education campaign. But some believe the most prolific file-traders should be held legally accountable.

"The subject is on the table," said one industry executive who requested anonymity. "The idea would be to discourage people. Clearly there have been no consequences yet."

The move toward suing individuals, first reported in The Wall Street Journal on Wednesday, would mark a substantial deviation from the path that record labels and movie studios have previously taken in their battles against online piracy.

In the past, labels and movie studios have targeted only companies that have profited--or intended to profit--by the rise in online piracy. The Recording Industry Association of America (RIAA) has successfully sued Napster and Audiogalaxy; it is continuing lawsuits against Madster (formerly known as Aimster), StreamCast Networks, Grokster and the company that created Kazaa. The industry group has said it intends to add Sharman Networks, which now operates the Kazaa network, to that list.

So far, the lawsuits have been filed for "contributory infringement," which means the labels have charged that companies such as Napster were knowingly aiding and abetting the real music-copiers. But for any of those suits to fly, it means the labels and the judges have acknowledged that the actions of individual file-swappers themselves were direct copyright infringement, and therefore potentially illegal.

Industry insiders say any lawsuits would likely target people who were offering large numbers of files for download by others. They cite a common belief in the industry, initially sparked by a study of Gnutella users conducted by Xerox's Palo Alto Research Center (PARC), that only about 10 percent of file-swappers provide about 90 percent of the content available through networks such as Kazaa.

Discouraging this 10 percent of "providers" would go a long way in reducing the amount of content available through file-swapping networks, industry insiders say.

Previously, record companies, movie studios and software companies have pursued individuals though their Internet service providers. Connecting to most peer-to-peer networks exposes a computer user's Internet address, which can be traced back to an ISP. Copyright owners have sent thousands of letters to ISPs complaining about subscribers' copyright infringement over the past year, resulting in warning letters to the subscribers, and in some cases cancellation of accounts.

The hard-rock band Metallica cited unnamed individuals in its lawsuit against Napster, and the band's attorney said he would likely add specific individuals later. That tack was later dropped, however.

All of this action has had only minimal effect on the total volume of file trading, however.

According to recent estimates by The Yankee Group research firm, close to 7.9 billion audio files were traded in 2001 by computer users 14 years and older. By 2004, they expect that number to rise to more than 11.4 billion.

Record industry insiders say there is no timetable for when potential suits against individuals would be launched.

 

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