In the first ruling of its kind in Taiwan, a Taiwanese district court on Thursday found peer-to-peer (P-to-P) file-sharing software maker Ezpeer.com not guilty of violating copyrights. The groups responsible for raising the suit vowed to appeal.
The case is a setback for the music, software and movie industries, but observers say it's just the beginning of a longer battle that could reach Taiwan's highest court, similar to the Grokster v. MGM case ruled on by the US Supreme Court earlier this week.
The cases share some similarities, in that both Ezpeer and Grokster provide software to users that allows them to swap everything from music to movies and software. Grokster also won some early court cases, but the US Supreme Court decision overturned them, and now the company can be held liable for copyright infringements committed by users of its P-to-P software.
Taiwan's Shihlin District Court said local laws do not specifically prohibit or limit file sharing activities, and that Ezpeer did not reproduce or publicly distribute the works of copyright holders.
"We feel vindicated by the decision," said Robin Chen, a spokesman at Ezpeer. "We'd like to work with the music and movie industries to find a way everyone can benefit from file sharing."
But the plaintiff in the case, the International Federation of the Phonographic Industry (IFPI) in Taiwan, disagreed with the court ruling.
"We will appeal to a higher court and even to the highest court in Taiwan," said Robin Lee, secretary-general of the IFPI in Taiwan.
Ezpeer is one of Taiwan's biggest file sharing software providers, but its product only runs in one language, Chinese. Although that limits its audience, its home page boasts support for a wide range of downloads, from videos and pictures to music, novels and games.
But unlike Kazaa, one of the most popular Internet P-to-P software makers, which provides its product for free, Ezpeer users have to pay what it calls a "software usage fee" of NT$100 (AU$4.22) per month.
"[Ezpeer] depends on users for income. You pay a monthly fee -- then it's like an all you can eat buffet," said Bradley C.H. Chen, legal counsel for Ezpeer at the Daylight Law Office in Taipei.
Observers say the user payments make the legal arguments trickier.
Money is always one of the key questions internationally in intellectual property disputes, said John Eastwood, co-chairman of the intellectual property rights committee of the European Chamber of Commerce in Taipei. It could be argued that Ezpeer is making money from someone else's intellectual property.
It's common for Taiwanese judges to tread carefully in cases that are new, like Internet downloading, he said, predicting that the final say in the local file-sharing debate likely won't come for a while.
The Taiwanese court took more than two-and-a-half years to reach its verdict on Ezpeer. A decision in a similar case involving Taiwan's other main file sharing software site, Kuro.com.tw, is expected in September.