R.I.P PTP Networks

[Fish boy]

Supreme Ct just overturned lower court decisions finding that the providers of the software that allow users to download music, movies, software... for free can be held liable for damages suffered by owners of copywritten works.

This is really a short summary and is a general interpretation, but my guess is that networks like limeware, bear share...etc the places to download music for free will pull their plugs (at elast until they find a way to address the latesty ruling).

[Fish boy]

for any one who wants to know more:

METRO-GOLDWYN-MAYER STUDIOS INC. V.GROKSTER, LTD. (04-480)
Web-accessible at:
http://supct.law.cornell.edu/supct/html/04-480.ZS.html

Argued March 29, 2005 -- Decided June 27, 2005
Opinion author: Souter

================================================== =============
Respondent companies distribute free software
that allows computer users to share electronic files through
peer-to-peer networks, so called because the computers
communicate directly with each other, not through central
servers. Although such networks can be used to share any type
of digital file, recipients of respondents' software have
mostly used them to share copyrighted music and video files
without authorization. Seeking damages and an injunction, a
group of movie studios and other copyright holders (hereinafter
MGM) sued respondents for their users' copyright
infringements, alleging that respondents knowingly and
intentionally distributed their software to enable users to
infringe copyrighted works in violation of the Copyright
Act.
Discovery revealed that billions of files are shared across peer-to-peer
networks each month. Respondents are aware that users employ
their software primarily to download copyrighted files,
although the decentralized networks do not reveal which files
are copied, and when. Respondents have sometimes learned about
the infringement directly when users have e-mailed questions
regarding copyrighted works, and respondents have replied with
guidance. Respondents are not merely passive recipients of
information about infringement. The record is replete with
evidence that when they began to distribute their free
software, each of them clearly voiced the objective that
recipients use the software to download copyrighted works and
took active steps to encourage infringement. After the
notorious file-sharing service, Napster, was sued by copyright
holders for facilitating copyright infringement, both
respondents promoted and marketed themselves as Napster
alternatives. They receive no revenue from users, but,
instead, generate income by selling advertising space, then
streaming the advertising to their users. As the number of
users increases, advertising opportunities are worth more.
There is no evidence that either respondent made an effort to
filter copyrighted material from users' downloads or
otherwise to impede the sharing of copyrighted files.
While acknowledging that respondents' users had directly
infringed MGM's copyrights, the District Court nonetheless
granted respondents summary judgment as to liability arising
from distribution of their software. The Ninth Circuit
affirmed. It read Sony Corp. of America v. Universal
City Studios, Inc., 464 U.S. 417, as
holding that the distribution of a commercial product capable
of substantial noninfringing uses could not give rise to
contributory liability for infringement unless the distributor
had actual knowledge of specific instances of infringement and
failed to act on that knowledge. Because the appeals court
found respondents' software to be capable of substantial
noninfringing uses and because respondents had no actual
knowledge of infringement owing to the software's
decentralized architecture, the court held that they were not
liable. It also held that they did not materially contribute
to their users' infringement because the users themselves
searched for, retrieved, and stored the infringing files, with
no involvement by respondents beyond providing the software in
the first place. Finally, the court held that respondents
could not be held liable under a vicarious infringement theory
because they did not monitor or control the software's
use, had no agreed-upon right or current ability to supervise
its use, and had no independent duty to police
infringement.


Continued in next post..

[Fish boy]

Held: One who distributes a
device with the object of promoting its use to infringe
copyright, as shown by clear expression or other affirmative
steps taken to foster infringement, going beyond mere
distribution with knowledge of third-party action, is liable
for the resulting acts of infringement by third parties using
the device, regardless of the device's lawful uses.
Pp. 10-24.

(a) The tension between the competing values of supporting creativity through
copyright protection and promoting technological innovation by
limiting infringement liability is the subject of this case.
Despite offsetting considerations, the argument for imposing
indirect liability here is powerful, given the number of
infringing downloads that occur daily using respondents'
software. When a widely shared product is used to commit
infringement, it may be impossible to enforce rights in the
protected work effectively against all direct infringers, so
that the only practical alternative is to go against the
device's distributor for secondary liability on a theory
of contributory or vicarious infringement. One infringes
contributorily by intentionally inducing or encouraging direct
infringement, and infringes vicariously by profiting from
direct infringement while declining to exercise the right to
stop or limit it. Although "[t]he Copyright Act does not
expressly render anyone liable for [another's]
infringement," Sony, 464 U.S., at 434, these
secondary liability doctrines emerged from common law
principles and are well established in the law, e.g.,
id., at 486. Pp. 10-13.

(b) Sony addressed a claim
that secondary liability for infringement can arise from the
very distribution of a commercial product. There, copyright
holders sued Sony, the manufacturer of videocassette recorders,
claiming that it was contributorily liable for the infringement
that occurred when VCR owners taped copyrighted programs. The
evidence showed that the VCR's principal use was
"time-shifting," i.e., taping a program for
later viewing at a more convenient time, which the Court found
to be a fair, noninfringing use. 464 U.S., at 423-424.
Moreover, there was no evidence that Sony had desired to bring
about taping in violation of copyright or taken active steps to
increase its profits from unlawful taping. Id., at 438.
On those facts, the only conceivable basis for liability was
on a theory of contributory infringement through distribution
of a product. Id., at 439. Because the VCR was
"capable of commercially significant noninfringing
uses," the Court held that Sony was not liable.
Id., at 442. This theory reflected patent law's
traditional staple article of commerce doctrine that
distribution of a component of a patented device will not
violate the patent if it is suitable for use in other ways. 35
U.S. C sect.271(c). The doctrine absolves the equivocal
conduct of selling an item with lawful and unlawful uses and
limits liability to instances of more acute fault. In this
case, the Ninth Circuit misread Sony to mean that when a
product is capable of substantial lawful use, the producer
cannot be held contributorily liable for third parties'
infringing use of it, even when an actual purpose to cause
infringing use is shown, unless the distributors had specific
knowledge of infringement at a time when they contributed to
the infringement and failed to act upon that information.
Sony did not displace other secondary liability
theories. Pp. 13-17.

(c) Nothing in Sony requires courts to ignore evidence of intent to
promote infringement if such evidence exists. It was never
meant to foreclose rules of fault-based liability derived from
the common law. 464 U.S., at 439. Where evidence goes beyond
a product's characteristics or the knowledge that it may
be put to infringing uses, and shows statements or actions
directed to promoting infringement, Sony's
staple-article rule will not preclude liability. At common law
a copyright or patent defendant who "not only expected but
invoked [infringing use] by advertisement" was liable for
infringement. Kalem Co. v. Harper Brothers, 222 U.S. 55,
62-63. The rule on inducement of infringement as
developed in the early cases is no different today. Evidence
of active steps taken to encourage direct infringement, such as
advertising an infringing use or instructing how to engage in
an infringing use, shows an affirmative intent that the product
be used to infringe, and overcomes the law's reluctance to
find liability when a defendant merely sells a commercial
product suitable for some lawful use. A rule that premises
liability on purposeful, culpable expression and conduct does
nothing to compromise legitimate commerce or discourage
innovation having a lawful promise. Pp. 17-20.

(d) On the record presented, respondents' unlawful objective is
unmistakable. The classic instance of inducement is by
advertisement or solicitation that broadcasts a message
designed to stimulate others to commit violations. MGM argues
persuasively that such a message is shown here. Three features
of the evidence of intent are particularly notable. First,
each of the respondents showed itself to be aiming to satisfy a
known source of demand for copyright infringement, the market
comprising former Napster users. Respondents' efforts to
supply services to former Napster users indicate a principal,
if not exclusive, intent to bring about infringement. Second,
neither respondent attempted to develop filtering tools or
other mechanisms to diminish the infringing activity using
their software. While the Ninth Circuit treated that failure
as irrelevant because respondents lacked an independent duty to
monitor their users' activity, this evidence underscores
their intentional facilitation of their users'
infringement. Third, respondents make money by selling
advertising space, then by directing ads to the screens of
computers employing their software. The more their software is
used, the more ads are sent out and the greater the advertising
revenue. Since the extent of the software's use
determines the gain to the distributors, the commercial sense
of their enterprise turns on high-volume use, which the record
shows is infringing. This evidence alone would not justify an
inference of unlawful intent, but its import is clear in the
entire record's context. Pp. 20-23.

(e) In addition to intent to bring about infringement and distribution
of a device suitable for infringing use, the inducement theory
requires evidence of actual infringement by recipients of the
device, the software in this case. There is evidence of such
infringement on a gigantic scale. Because substantial evidence
supports MGM on all elements, summary judgment for respondents
was error. On remand, reconsideration of MGM's summary
judgment motion will be in order. Pp. 23-24.
380 F.3d 1154, vacated and remanded.

Souter, J., delivered
the opinion for a unanimous Court. Ginsburg, J., filed a
concurring opinion, in which Rehnquist, C. J., and
Kennedy, J., joined. Breyer, J., filed a concurring opinion,
in which Stevens and O'Connor, JJ., joined.

[Marlin275]

the places to download music for free will pull their plugs (at elast until they find a way to address the latesty ruling).

Will move offshore, this affects US only.

[joel3078]

Yep remember this is the world wide web and the good ol USA does not run it. Also notice that spyware and adware killers come from overseas also.

[Fish boy]

Yep remember this is the world wide web and the good ol USA does not run it. Also notice that spyware and adware killers come from overseas also.

Good point Marlin.

Joel, thanks for the heads up, I was confused about wheather the USA owned the world wide web and why they did not change the name to something more geographically specific. Just figured the WWW was in honor of Bush :rlol:

[florida gator]

I thought Al Gore owned the web? :D

[Lenny]

PTP is legal in Canada still. They have never gotten this through the Courts and won...

[Fish boy]

Lenny, it is legal in US too, but for the first time the facilitator of the file sharing can be held liable for damages resulting from unauthorized distribution of copywritten material. Most of the cases that have been in the courts have been about the copyright holder going after the individuals. My guess is that this is what has been unsuccssful in the canadian courts, but successful in US courts, but just a guess. Can I come to your house and download music?? :D

[Marlin275]

Yep remember this is the world wide web and the good ol USA does not run it.
Turns out the good ol USA does run the web.



U.S. Won't Cede Control of Net Computers

By THE ASSOCIATED PRESS
Published: June 30, 2005
Filed at 4:00 p.m. ET

NEW YORK (AP) -- The U.S. government said Thursday it would indefinitely retain oversight of the Internet's main traffic-controlling computers, ignoring calls by some countries to turn the function over to an international body.

The announcement marked a departure from previously stated U.S. policy.

Michael D. Gallagher, assistant secretary for communications and information at the U.S. Commerce Department, shied away from terming the declaration a reversal, calling it instead ''the foundation of U.S. policy going forward.''

''The signals and words and intentions and policies need to be clear so all of us benefiting in the world from the Internet and in the U.S. economy can have confidence there will be continued stewardship,'' Gallagher said in an interview with The Associated Press.

Government officials had in the past indicated they would one day hand control of the 13 ''root'' computer servers used to direct e-mail and Web traffic to a private organization with international board members, the Internet Corporation for Assigned Names and Numbers.

http://www.nytimes.com/aponline/technology/AP-Internet-Control.html

[joel3078]

[QUOTE=Marlin275]Turns out the good ol USA does run the web.

Hmmmm 13 root computers control the flow of info. Now there is a lucky number. Wonder if NASA helped em as they have such good luck with 13.

Lemme guess, next the good ol USA is gonna control all of the oil so gas prices will come back down andwe can run our Donzi's all the time.