We Lost

Supreme Court Rules Against File Swapping

Taken from ZDNet UK

America's top judges have found against Grokster and StreamCast, ruling that peer-to-peer services can be held responsible for copyright infringements committed by their users.

In a unanimous decision, the justices ruled companies that build businesses with the active intent of encouraging copyright infringement should be held liable for their customers' illegal actions.

It won't immediately shut down access to the trading networks, however. The court's ruling will send the case back to the lower courts, which will review the evidence against Grokster and co-defendant StreamCast in the light of Monday's decision.

"The most important message from today's historic decision is that progress and innovation do not have to come at the expense of recording artists, songwriters and the people who make their living in the entertainment industry," Warner Music Group chief executive Edgar Bronfman said in a statement. "This important decision will allow artists and the creative community to prosper side by side with the technology industry."

The peer-to-peer companies involved warned that the court had opened the floodgates to litigation against a wide variety of technology companies, but said they would continue to distribute their software, and expected to be cleared of any wrongdoing.

"We are confident that it will be proven that Morpheus does not promote or encourage copyright infringement," said StreamCast Chief Executive Officer Michael Weiss. "We're staying in this for the fight. We're going to continue to innovate and come out with new products."

Four generations of file swapping have laid the groundwork for the Supreme Court decision. Technology companies have feared that a new copyright-focused standard aimed at controlling peer-to-peer networks might result in a rise in lawsuits aimed at blocking new products. The Betamax ruling had protected generations of products, ranging from CD burners to Apple's iPod to personal computers.

Some in the technology world said the result could lead to more litigation against young companies with new technologies.

"This is a very dangerous decision for technology and innovation," said Ed Black, chief executive officer of the Computer and Communications Industry Association. "If you think of the Sony decision as a shield or an umbrella, we're afraid some holes have been punctured in that umbrella."

Michael Petricone, vice president of technology policy for the Consumer Electronics Association, added that "it is a real concern for entire industry. We are faced with competitors in China and India who do not face the same litigation burden that companies will with this decision."

We lost but the fight goes on. Time for p2p and BitTorrent to come together.