Judge ponders future of file-swapping services

A U.S. federal district court judge heard legal arguments Monday in a case that could help determine whether popular file-swapping services such as Morpheus and Kazaa will go the way of Napster Inc. or be permitted to thrive.

As expected, no ruling was issued after the two-hour hearing, in which attorneys for the music and motion picture industries squared off against lawyers for file-swapping systems Morpheus and Grokster. The judge is expected to issue a ruling in the coming weeks that will determine whether or not the case goes to trial, attorneys for both sides said.

The entertainment industries accuse the peer-to-peer (P-to-P) operators of assisting copyright infringement on a massive scale and have asked the court for a summary judgment that would bring their file-trading services to a close. If the judgment were granted it would spell a resounding victory for the copyright holders, which have battled the P-to-P trading of their works since the advent of Napster.

The P-to-P operators, meanwhile, are seeking a summary judgment of their own, asking that the case be tossed out of court.

Monday's hearing was intended to help U.S. Federal District Court Judge Stephen Wilson decide whether to grant either sides' motion or allow the case to go to trial, an option some observers have said is more likely. The case is being heard at the U.S. District Court, Central District of California, in Los Angeles.

"As we expected, the judge heard arguments for about an hour and a half and then didn't issue any order," said Fred von Lohmann, a senior intellectual property attorney with the San Francisco-based Electronic Frontier Foundation, which is assisting Morpheus with its defense.

"He clearly had a lot of questions and thought hard about the case, and at the end he said he'd give us an order shortly. I think it'll be at least a couple of weeks."

Matthew Oppenheim, a senior vice president for business and legal affairs with the Recording Industry Association of America, said Judge Wilson has a reputation for being "thorough and expedient."

The suit takes aim at three services: Morpheus, Grokster and Kazaa. Kazaa's distributor, Sharman Networks Ltd., contends that it can't be sued in the U.S. because it is incorporated in the South Pacific island nation of Vanuatu and has no substantial ties here. It did not take part in Monday's hearing but remains a defendant in the lawsuit, Oppenheim said.

Observers expected the judge to take his time over any decision. Stacked one on top of the other, the motions filed in the case would form a pile of paper eight feet tall, giving the judge plenty to think about, von Lohmann said.

The judge's questions Monday centered on such matters as how much control the file-swapping services have over the content traded by their members, and to what extent they are responsible for any copyright infringement that may occur, the attorneys said.

"Judge Wilson indicated that he found the arguments useful, and he indicated that that's not often the case. He said such hearings are usually a case of him demonstrating his patience with lawyers, and everyone laughed at that," Oppenheim said.

Judge Wilson suggested he might issue a draft ruling and then submit that to the parties in the case for further comment, von Lohmann said, suggesting that an outcome may be even farther down the road. Von Lohmann emphasized the judge is not working under a fixed schedule.

If the summary motions are refused, the case will go to trial, which would mark the farthest point a P-to-P service has gotten in its legal travails against the powerful copyright holders. Napster and fellow file swapper Aimster (which now operates under the name Madster) both were hit with preliminary injunctions to block copyright-protected works from being traded. Napster closed down in bankruptcy last year and Madster is still fighting the injunction.

The "new generation" P-to-P companies argue they are significantly different from the file-swapping networks of old in that they do not have central servers and therefore cannot easily be shut down. They also contend that their software can be used for a variety of "non-infringing" uses, such as allowing people to share their own digital photographs and over the Internet, and say they are software distributors with no control over what gets traded using their applications.

Attorneys for the recording and motion picture industries see things differently. In court papers filed in September, they argued that the defendants' file-swapping systems were designed to "emulate Napster, and then to surpass it," and say they achieved that goal "beyond their wildest dreams."

The systems have tens of millions of users and share more types of media files than Napster was able to, and the defendants "reap far more financial benefit than Napster ever did" by selling advertisements on their sites, the attorneys argued.

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