Canadian court rocks record biz

CRIA surprised as judge sez downloads not a violation

Corrections were made to this article on Apr. 4, 2004.

TORONTO — A Canadian court dealt a severe blow to the recording industry with a ruling Wednesday that music file-sharing on the Internet is legal.

Neither downloading nor sharing digital music files online infringes copyright, according to Judge Konrad von Finckenstein of the Federal Court of Canada. It’s a surprise twist to a decision in what the Canadian Recording Industry Assn. thought was going to be “a very straightforward procedural process that the U.S. has been using very effectively for quite a while,” CRIA prexy Brian Robertson told Daily Variety.

Ruling is believed to be the first in the world to OK file-sharing by individuals.

The CRIA went to court several times in March to force Internet service providers to reveal the identities of high-volume Internet music swappers so it could launch copyright infringement lawsuits against them. Suits were part of a global legal assault against 247 pirates in Canada, Italy, Denmark and Germany — the first lawsuits against file-swappers outside the U.S.

The CRIA says that music file-sharing has cost the Canuck industry C$425 million ($325 million) in lost music-sales revenues in the last five years.

Not only did von Finckenstein — a former commissioner of competition at the Competition Bureau of Canada — turn the CRIA down flat, he went much further, saying that making music available online appeared to be legal.

Uploading and downloading does not constitute the distribution of copyrighted material, according to the decision.

“There must be a positive act by the owner of the shared directory, such as sending out the copies or advertising that they are available for copying,” wrote von Finckenstein, who compared putting music files on a shared directory linked to a service such as Kazaa and Morpheus to putting a photocopy machine in a library.

“This has turned from a very normal day-to-day court procedure process into a ruling on the legalities of downloading and uploading, and that has raised a lot of eyebrows in the music industry here,” said the CRIA’s Robertson. “There’s shock and consternation (in) the Canadian intellectual property community.”

The CRIA plans to appeal the decision. Robertson believes sharing music online should be illegal in Canada.

Decision is not expected to affect the legal position of file-sharers elsewhere, he said, “unless Kazaa wants to set up office here, which I’m not ruling out.”

The decision stands in sharp contrast to those in the U.S., where courts have consistently allowed civil action against those who trade copyrighted content online, resulting in the Recording Industry Assn. of America’s spate of suits against digital music pirates over the past several months.

Ruling is likely to spur a legislative response in Canada.

(Ben Fritz in Hollywood contributed to this report.)

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