New P2P company aims for legitimate swapping

A Dutch company, hoping to capitalize on a year-old Dutch court ruling that legitimized file-swapping services in the Netherlands, plans to offer software and a home base to file-sharing service providers. However, experts wonder if the Netherlands is really a file-sharing haven.

Launched Friday, "The Honest Thief" is a project of Plass Global Resources BV (PGR) in Arnhem, the Netherlands. The company plans to offer software based on the Gnutella peer-to-peer (P-to-P) protocol as well as legal advice on how to set up a Dutch business to anybody wanting to start a file-sharing service, spokesman Steven Phenix said Monday.

The software is being tested and should be out in the second quarter. PGR has one U.S.-based company looking to establish a file-swapping unit in the Netherlands and use the P-to-P software, Phenix said. He declined to name the company because the deal is not yet final.

PGR has been in operation for about nine years developing software for customers of Centraal Bureau Bouwtoezicht BV (CBB), a Dutch construction management company headed by Pieter Plass, who is also behind The Honest Thief. Not coincidentally, The Honest Thief is also the title of a management book Plass wrote a few years ago.

"Call it file sharing or shoplifting, here in Holland we call it good business," Plass said in a statement.

File-sharing applications such as Kazaa and Morpheus allow users to swap files for free. The entertainment industry has been fighting the providers of such applications in court because file-sharing is used to swap copyright-protected songs and movies, which the industry compares to stealing.

Napster and Aimster were successfully shut down, but the recording industry suffered a setback in March last year when the Amsterdam Appeals Court said Kazaa BV can't be held liable for the copyright-infringing actions of users of the Kazaa file-sharing application. The decision is being appealed at the Supreme Court of the Netherlands, which is expected to rule in October.

Kazaa itself did not profit from the ruling. The company sold its assets to Sharman Networks Ltd., in the Pacific island nation of Vanuatu, after a lower court threatened hefty fines.

The Honest Thief is an "interesting initiative," Kazaa lawyer Christiaan Alberdingk Thijm said Monday. "The Netherlands is the only country that has a court ruling that allows P-to-P. But the situation can change when the Supreme Court rules later this year."

The International Federation of the Phonographic Industry (IFPI), which represents the recording industry worldwide, intends to continue fighting in court.

"We don't believe that the Netherlands is a haven for unauthorized P-to-P services and we have every intention of proving it in the courts. It is hard to see how someone can claim they are making 'some honest money' by stealing other people's works," Jay Berman, IFPI chairman and chief executive officer said, citing The Honest Thief Web site.

Buma/Stemra, the music rights organization in the Netherlands, also said the Netherlands is not a playground for file-swapping companies.

"It is not a haven here; I think you can conclude that from the fact that our case (against Kazaa) is still not finished," George Knops, a spokesman for Buma/Stemra said.

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