Biz seeks reversal of copyright ruling

Studios, labels appeal Grokster/Streamcast decision

WASHINGTON — After suffering a serious legal setback in its fight against Internet file swappers earlier this year, the entertainment industry is up and swinging again.

A group of studios, record labels and music publishers Tuesday appealed a Ninth District Court ruling that relieved file swappers Grokster and Streamcast Networks of liability for the rampant music downloading taking place through their Web sites and software.

“This nation is founded on the fundamental principle that taking property that belongs to someone else is wrong, legally and morally, whether you do the stealing yourself, or you aid others in stealing,” said Motion Picture Assn. of America prexy-CEO Jack Valenti. “It is on that simple, undeniable fact that we are appealing this decision.”

A rep for Grokster could not be reached for comment late Tuesday. In a statement, Streamcast topper Michael Weiss called the appeal “just one of several assaults that we face from the (Recording Industry Assn. of America).”

Tech hurdles

Weiss accused the entertainment biz of trying to put the brakes on innovation and predicted the file swappers would prevail. If not, he vowed to take the case to the Supreme Court. He also warned that if the court does not side with the peer-to-peer companies, Congress will be hearing from 63 million angry file swappers across the country.

“The central issue here is whether P2P file-sharing developers should be held liable for providing a product that has many useful and legal purposes just because it could be used the wrong way,” Weiss said.

“In our case, as in the Sony Betamax case two decades before, the federal court recognized that you can’t ban new technology just because it threatens an old distribution model. It will be a sad day for everyone if the appeals court determines otherwise.”

The ruling, issued in late April, stunned the entertainment industry after the same court ruled in showbiz’s favor in a well-known case against Napster.

In briefs filed Tuesday, industry lawyers argued that the district court dramatically departed from well-established copyright law in its April decree, the first major decision in which a court sided with the file-sharing community rather than the Hollywood heavyweights repped by the MPAA and RIAA.

Legal experts viewed the decision as shifting the onus of responsibility for infringement toward the users themselves, spurring the entertainment biz to start suing individual swappers. (The industry has since sued several college students and has issued more than 1,000 subpoenas to individual music downloaders in recent months.)

“We appreciate that the district court affirmed that the underlying activity of downloading or distributing copyrighted works is illegal, but the ruling on the services themselves rewrote years of well-established copyright law,” said RIAA prexy Cary Sherman. “It was wrong. These are businesses that were built for the exclusive reason of illegally exchanging copyrighted works, and they make money hand over fist from it. The court of appeals should hold them accountable.”

The full briefs were under court seal Tuesday, but the RIAA and MPAA provided some highlights, arguing that the file-swapping companies should be held liable because they :

  • “Reap millions of dollars in revenue from their online trading bazaars by selling advertising they display to their users while they engage in infringement.”

  • “There is no genuine dispute that the raison d’etre of defendants’ networks is the unlawful exchange of copyrighted songs and movies. The harm to plaintiffs continues to be enormous: Defendants have, in essence, unlocked the door to every video and record store in the country and invited every person to come in and copy as much as they want, in flat violation of plaintiffs’ copyrights. ”

  • “It was undisputed, for example, that defendants currently filter or block certain material available over their networks, i.e., pornographic works, viruses, and bogus files. Instead, of employing their filtering to stop piracy defendants turned a blind eye to detectable acts of infringement for the sake of profit.”

  • “The District Court incredibly equated MusicCity and Grokster to Xerox, rather than the more analogous comparison to the illegitimate Napster service. … Comparing Xerox to MusicCity and Grokster is like comparing a farmer who sells chickens to a promoter and organizer of cockfights.”

The briefs also accuse the court of making a mockery of copyright law and supporting an illegal activity that seriously hampers songwriters and music publishers, struggling to support new legal Internet music services that charge fees for downloading music.

‘Bleak message’

“(The April ruling) sends a bleak message to young songwriters and prospective songwriters that they should not expect to pursue careers in songwriting like the Cole Porters, Irving Berlins, and Leiber and Stollers of the last century. Unlike their forbears, their works will be given away for free,” reps from the National Music Publishers’ Assn. argued.

The post-Napster legal wrangling over online music and movie theft began when entertainment groups sued Kazaa, Grokster and Streamcast for contributing to copyright infringement.

The claims against Kazaa are pending before the district court.