Court rejects piracy claims against P2P file-sharing networks

08/20/04 - newratings.com

NEW YORK, August 20 (New Ratings) – A federal appeals court in the US has declared that the online file-sharing software companies are not liable to copyright infringement charges.

The US 9th Circuit Court of Appeals ruled in favour of StreamCast, Grokster and other file-sharing software companies yesterday, while saying that software companies are not responsible for what the users do with their peer-to-peer (P2P) networks. The three-judge panel reportedly said that the structure of the P2P networks made it impossible for the software companies to exert any control over the users. The court ruled that the file-sharing networks should not be outlawed because of the significant legal applications associated with them, while giving a precedent of a previous battle of the movie studios against the video cassette recorders (VCRs) in the 1980s.

The ruling is being considered a severe blow for the anti-piracy efforts of the movie studios and the music companies. The music and movie industries are said to have witnessed significant revenue loss due to the illegal file sharing on the internet through P2P networks. The US movie studios and music companies were seeking damages from the file-sharing software companies for possible copyright infringement.

The users and operators of the online file-sharing networks have expressed their satisfaction with the court decision, while the movie studios and music companies have expressed their intention to continue their anti-piracy efforts.