Recording, movie industries appeal file-trading ruling

Three entertainment groups have appealed an April 25 U.S. District Court ruling saying that operators of two file-sharing services are not liable for any copyright infringement that may be happening on their networks.

Late Monday, the Recording Industry Association of America (RIAA), the Motion Picture Association of America (MPAA) and the National Music Publishers' Association filed an appeal to a Los Angeles district court judge's decision that said the operators of the Grokster and Morpheus peer-to-peer (P-to-P) services couldn't know when users were trading copyrighted works.

As expected, the three groups have asked the U.S. Court of Appeals for the Ninth Circuit to overturn the decision by U.S. District Court Judge Stephen Wilson and hold StreamCast Networks, the operator of Morpheus, and Grokster, responsible for copyright violations that happen on those P-to-P networks.

Wilson's decision recognized that P-to-P services have many legitimate uses, Michael Weiss, chief executive officer of StreamCast Networks, said in a statement. "In our case ... the federal court recognized that you can't ban new technology just because it threatens an old distribution model," Weiss added. "We expect to prevail and if we do not, we will take this to the Supreme Court if we must. We also believe that the 63 million file sharing, voting Americans will take the issues to Congress, so that the laws are passed to reflect social and economic realities ..."

New laws should allow for compulsory licensing similar to radio royalties, Weiss said, and he also suggested a small tax on recordable media.

The RIAA and MPAA argued in their appeal brief that the P-to-P services make a huge profit from copyright infringement. "Defendants reap millions of dollars in revenue from their on-line trading bazaars by selling advertising they display to their users while they engage in infringement," the brief said.

The judge's decision "rewrote years of well-established copyright law," Cary Sherman, president of the RIAA, said in a statement. "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."

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