The U.S. Supreme Court on Friday agreed to hear a case focusing on whether peer-to-peer (P-to-P) software vendors should be penalized for unauthorized file trading when their software is used.
The Supreme Court decision follows rulings by lower courts that P-to-P vendors aren't liable for copyright violations committed by users of their services. In August, the U.S. Court of Appeals for the Ninth Circuit ruled unanimously to uphold a lower court ruling that P-to-P companies Grokster, StreamCast Networks and MusicCity.com were not liable for users' copyright violations.
The Recording Industry Association of America (RIAA) and the Motion Picture Association of America applauded the Supreme Court's decision. The two trade groups, along with the National Music Publisher's Association of America, brought the original lawsuit against P-to-P services, but a district court judge dismissed the case in April 2003.
By allowing P-to-P services to continue operating, the courts disadvantaged so-called legitimate services, Mitch Bainwol, RIAA chairman and chief executive officer, said in a statement. P-to-P vendors should be able to filter copyrighted material on their networks, just as most P-to-P vendors now filter out viruses, he added.
"We appreciate that the Supreme Court has agreed to review this case," he added. "There are seminal issues before the court -- the future of the creative industries and legitimate Internet commerce. These are questions not about a particular technology, but the abuse of that technology by practitioners of a parasitical business model. Bad actors who have hijacked a legitimate technology for illegitimate means must be held accountable."
P-to-P vendors have argued that the music industry refuses to license its products to them and instead has focused on suing P-to-P users. Since September 2003, the RIAA has filed more than 7,000 lawsuits against alleged file traders.
Public Knowledge, an intellectual property advocacy group, called on the Supreme Court to act consistently with its ruling in the 1984 Sony vs. Universal City Studios case. In that case, involving VCR technology, the court decided that makers of technologies that have significant noninfringing uses could not be held liable for copyright violations committed by their customers.
"The Sony case is at the heart of the technological growth for the last 20 years," said Gigi B. Sohn, president of Public Knowledge. "Now is not the time to hamper it or crimp it in any way."
It's understandable why the Supreme Court would want to hear the Grokster case because it's interesting, Sohn said. "I do hope the court confirms what the district court said -- that is, technologies are disruptive, and (entertainment) companies always manage to respond to them," she added.
Sohn and Adam Eisgrau, executive director of trade group P2P United, said the Supreme Court's decision to take the case doesn't mean it's likely that the court will overturn the lower courts' decisions. Grokster and StreamCast, distributor of the Morpheus P-to-P software, are both members of P2P United. MusicCity.com was a site operated by StreamCast. Eisgrau expressed optimism based on the Ninth Circuit's legal reasoning and the precedence of the Sony case.
"We are confident the court will find a path that will not stymie innovation in the interest of parochial entertainment groups," Eisgrau said.