Record Industry Sues Morpheus And Other Decentralized File-Sharing Services

New action targets companies that used FastTrack technology to lure former Napster users.

Striking another blow in its fight against unauthorized music downloads, the record industry on Tuesday sued Morpheus, Kazaa and Grokster, three of the services music fans have used to trade files over the Web since the shutdown of Napster.

"We cannot sit idly by while these services continue to operate illegally, especially at a time when new legitimate services are being launched," Recording Industry Association of America (RIAA) president and CEO Hilary Rosen said in a statement. Each of the five major record companies is backing either MusicNet or Pressplay, two services that promise to offer subscription downloading services by year's end.

The three companies sued on Tuesday all use the same technology. Kazaa is operated by Amsterdam-based FastTrack, which developed the peer-to-peer technology that allows users to find and trade files directly with each other without going through a centralized server, as Napster had used.

Morpheus, owned by the Nashville company MusicCity, and West Indies-based Grokster also use the FastTrack technology. Any of the three services' users has access to all online FastTrack registrants.

Morpheus, Kazaa and Grokster grew in popularity during the spring when Napster's offerings dwindled and finally vanished. Napster shut down in July as a result of an RIAA lawsuit. The company used a centralized server to provide users with a list of available files, something neither FastTrack nor the similar Gnutella network does.

FastTrack users, however, must log on to the network through a centralized entry server with a user name and password — which may make it an easier target than Gnutella. Kazaa, Morpheus and Grokster may make it more difficult for users to share files because of the central log-on server, said Aram Sinnreich, digital-music analyst for Jupiter Media Metrix.

The Motion Picture Association of America is also a plaintiff in the suit, which accuses the companies of facilitating and profiting from the trading of copyrighted music and movies. Although the services don't sell files for downloading, they do sell advertising.

Unlike Gnutella, FastTrack's software is privately owned by Consumer Empowerment BV and licensed to MusicCity and Grokster. Gnutella software — used by LimeWire, BearShare and other services — on the other hand is "open-source," meaning anyone may use and develop it for free.

A spokesperson for MusicCity said his company was still examining the lawsuit and had no immediate comment. Spokespersons for Kazaa and Grokster were unavailable by press time.

In an interview shortly before the lawsuit was filed, MusicCity director of sales and marketing Trey Bowles said more than 23 million copies of Morpheus have been downloaded since it launched in April.

"We don't promote or condone the transfer of illegal copyrighted material," Bowles said, adding that he didn't know how much trading with Morpheus involves music files. "If we could tell you that, we'd be Napster."

Kazaa CEO Niklas Zennstrom said on Monday via e-mail that more than 13.6 million copies of the program have been downloaded, with more than one million copies downloaded last week.

Even if Morpheus, Grokster and Kazaa were to shut down, the network of users who've already downloaded the software would go on, Sinnreich said

Tuesday. "I don't think those companies will stick around, but there will be perpetual access to file sharing."

Unlike FastTrack, services using the Gnutella network require no log-in process and lack a centralized entry point to the network. So far, the RIAA has not taken action against LimeWire, BearShare or any other service using the Gnutella network, and an RIAA spokesperson would not comment Wednesday (October 3) on the possibility of future lawsuits.

LimeWire founder and CEO Mark Gorton said that while he's aware legal action could be right around the corner, he believes his company's product is completely legal in light of Gnutella being free and decentralized.

"There's nothing inherently different about it than e-mail," Gorton said. "People trade illegal things all the time, and the RIAA should go after those people. But they don't, because those people are their customers. So they go after some third party."

Sinnreich points to previous court rulings favoring copyright holders, and hindering Napster, as signs LimeWire and other companies providing Gnutella clients shouldn't get too comfortable. "The courts have shown themselves to be very conservative in their interpretation of what software should be allowed to do with intellectual property," he said.

(This story was updated at 6:09 p.m. ET Wednesday, October 3, 2001.)