Escalation in P2P War

The entertainment industry is going the last mile in its war against file sharing. On Friday, October 8, the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), and the National Music Publishers Association (NMPA) appealed to the US Supreme Court to overturn a lower court's ruling earlier this year that peer-to-peer (P2P) file-trading networks can't be held liable for copyright infringement.

Hoping to have the case heard in the current session, the plaintiffs filed a 46-page petition seeking the reversal of a finding by the 9th US Circuit Court of Appeals that affirmed a previous ruling by a lower court that peer-to-peer networks Grokster and StreamCast Networks, operator of the Morpheus service, could not be held responsible for copyright violations by users of their services. In the early 1980s, Walt Disney Company and its allies pursued Sony Corporation all the way to the Supreme Court in an attempt to suppress the burgeoning market for videocassette recorders. As in the fight against P2Ps, the plaintiffs charged that making and marketing the devices enabled copyright violations.

The Court ruled against Disney in 1984, after the defendants successfully argued that there were many valid uses for VCRs. The technology that the industry fought so hard to suppress became one of its dominant revenue streams. Video rentals and sales now account for 60% of Hollywood's revenue, according to industry analysts. In a similar vein, authors of the MGM v. Grokster appeals court ruling astutely noted, "New technologies are always disruptive to old markets."

At the core of the lower court's ruling in favor of P2Ps was the premise that there are many legitimate uses for file sharing, and simply because a technology can be used to circumvent the law doesn't mean it should be illegal. Telephone companies were long ago exonerated from responsibility for plans that criminals make using their services. The entertainment industry has consistently maintained that P2Ps are fundamentally different, created intentionally to help people violate copyrights. Businesses such as Grokster and StreamCast were created "to avoid all legal liability with the full knowledge that over 90% of the material traversing their applications belongs to someone else," stated MPAA president and CEO Dan Glickman.

The entertainment industry's petition accuses the defendants of inflicting "catastrophic, multibillion-dollar harm" on their businesses. The Supreme Court has a month to decide if it will hear the case. Passing over it would let the appeals court ruling stand.

Elsewhere on the copyright front, the so-called "Induce Act" sponsored by Senator Orrin Hatch (R-UT) died in committee after representatives of the tech sector and the entertainment industry failed to reach agreement on the proper response to digital copyright violations. Hatch's controversial bill would have increased the potential punishment for large-scale file sharing to three years in prison. At present, punishments for convicted violators are limited to fines.

To date, the RIAA has issued approximately 5000 subpoenas against suspected file-sharers in the US, and has wrung payments out of many who decided it was cheaper to settle than to proceed to court. In early October, the music industry expanded its legal campaign in Europe, where the International Federation of the Phonographic Industry (IFPI) and the British Phonographic Industry (BPI) launched lawsuits against 459 alleged copyright violators in six European countries: Austria, Denmark, France, Germany, Italy, and the United Kingdom.

The move brings the number of subpoenas that have been issued against European music fans to approximately 650, and is the first time that such suits have been brought in France and Britain. The UK cases are being pursued in civil courts, stated an announcement on the BPI website. Worldwide, pirated music was a $4.5 billion business last year, with 1.1 billion unauthorized discs sold, according to figures published by the IFPI.