In an enormous blow to the music and motion picture industries, a Los Angeles federal judge dismissed a lawsuit against file-sharing services Grokster Ltd. and StreamCast Networks Inc. Friday, saying that they can’t be held culpable for illegal file trading done over their networks.
The ruling, made by U.S. District Court Judge Stephen Wilson, represents an almost complete turnaround from previous victories the record and motion picture industries have had in cases involving illegal peer-to-peer (P-to-P) file trading.
In his opinion, Wilson ruled that the P-to-P networks have substantial noninfringing uses in addition to infringing uses that cannot be dismissed.
“It is undisputed that there are substantial noninfringing uses for defendants’ software,” Wilson wrote, such as distributing movie trailers, free songs and other noncopyright works.
Furthermore, he ruled that the P-to-P network operators do not have any direct knowledge of when illegal trading is happening on their systems, said Grokster spokesman Wayne Rosso.
While Wilson wrote that “it is undisputed that defendants are generally aware that many of their users employ defendants software to infringe copyrighted works” he said that direct knowledge of users’ infringement could not be proven.
The judge compared the case to the ruling in Universal City Studios Inc.’s lawsuit against Sony Corp., in which the court said that the sale of video recorders did not subject Sony to contributory copyright liability.
“This is a huge victory for us,” Rosso said. “And one of the remarkable things is that this judge showed a rare comprehension of both the technical and legal matters.”
The entertainment industries sued Grokster, StreamCast Networks, which runs the Morpheus file swapping system, and Kazaa distributor, Sharman Networks Ltd., accusing them of assisting copyright infringement on a massive scale and asked the court for a summary judgment that would shut their file-trading services down.
Friday’s ruling does not directly apply to Kazaa, however, which has been arguing that it cannot be held to U.S. law given that it is incorporated in the South Pacific island nation of Vanuatu and has no ties here.
Furthermore, the ruling only pertains to the current versions of Grokster and StreamCast’s products and services and does not apply to past versions of their software or other past activities.
Representatives for the Recording Industry Association of America (RIAA) and Motion Picture Association of America (MPAA) were not immediately available to comment Friday. They are expected to appeal the ruling.