Morpheus, Grokster Are A-OK, Judge Says

Judge rules that companies behind Morpheus, Grokster networks not responsible for how people used their software.

The file-sharing community scored a major victory in court Friday when a judge ruled that the companies behind the Morpheus and Grokster networks were not responsible for how people used their software.

U.S. District Judge Stephen V. Wilson determined that Streamcast Networks Inc., distributors of the software that drives Morpheus, and Grokster Ltd., which services its own network, are in themselves legal, despite the widespread copyright infringement some of its users propagate. The companies are being sued by the music and motion-picture industries for copyright infringement.

The decision fell in line with a long held defense voiced by both companies: that they were no different than manufacturers of VCRs, CD burners, and even photocopy machines.

"Grokster and Streamcast are not significantly different from companies that sell home video recorders or copy machines," the judge wrote in his decision.

Although those devices may be used to illegally copy intellectual property, they also have legitimate uses. It can be argued that peer-to-peer file sharers like Morpheus and Grokster can be used to spread the word about your favorite chicken-soup recipe just as easily as they can offer up every track of the new Madonna album. The precedent in such disputes was established in the 1984 Sony Betamax case, in which the film studios tried to stop the company from selling home video recorders, and Judge Wilson cited that case in his decision.

"We believe this case is about technology, not piracy, and today the court agreed, making it clear that technology companies are not responsible for every misuse of the tools they make," said an attorney for Streamcast, Fred von Lohmann of the Electronic Frontier Foundation, in a statement.

Grokster President Wayne Rosso echoed the sentiment. "The court recognized that our file-sharing software has numerous legal and beneficial uses," his statement read. "This opinion lifts the cloud the plaintiffs have attempted to cast over innovation and investment. It makes clear that innovators will not be held liable for creating or investing in new technologies. This ruling also means that the labels and studios cannot ban 21st century technology in defense of their inefficient and outmoded 20th century distribution models."

The Recording Industry Association of America and the Motion Picture Association of America have said they will appeal the decision.

More than 110 million copies of the Morpheus software have been downloaded, while nearly twice as many copies of the most popular file-sharing network, Kazaa, have been. Kazaa, whose network boasts about 4 million users at any one time, was not a part of this decision because, although it is also being sued by the movie and film industries, it did not join its contemporaries in their request for summary judgment (which is when a request is made for a decision by the court based upon legal arguments only, where no material facts are in dispute). The same logic, however, would apply to the case against Kazaa, whose software is distributed by Sharman Networks Ltd.

Judge Wilson's decision would have not applied to the now-defunct Napster, since peer-to-peer networks operate without a central server or hub that can monitor or control the file traffic. Unlike Napster, Morpheus and Grokster have no record, knowledge or control of what files are traded on the network. Previous versions of the software, which operated with different technology, may still be subject to liability.

Having been legally cuffed from going after the networks, at least until their appeals, the RIAA and MPAA's only other recourse is going after individuals. The RIAA had previously been reluctant to go after what it considers to be its consumer base until complaints were filed against four college students for operating their own file-sharing networks on their schools' servers (see "RIAA Sues Four College Students For File Sharing").

The overwhelming task of pursuing the thousands, perhaps millions, of online pirates was facilitated by last week's court decision that ordered Verizon Communications, Inc. to cough up the names of two subscribers to its Internet service suspected of trading hundreds of copyrighted files per day (see "Verizon Surrenders Names Of Suspected Song Pirates To RIAA").

While Morpheus, Grokster, Kazaa and other peer-to-peer networks are rejoicing over the court's decision, legitimate, label-approved digital download sites like MusicNet, Pressplay, and most recently Apple's iTunes Music Store, which all pay royalties to the copyright holders, must perceive it as a setback.

The timing couldn't have been worse for Apple, which launched its service at a press conference on Monday (April 28). Unlike subscription-based MusicNet and Pressplay, which require users to pay a monthly fee in order to access a certain amount of streaming music and downloads, some of which may be burned to a CD, the iTunes Music Store allows more than 200,000 songs to be downloaded individually at 99 cents apiece, and they can be burned to an unlimited number of CDs from there.

The iTunes Music Store also makes songs available on an unlimited number of iPods, Apple's portable digital music player, an improved model of which was unveiled at the press conference. The third generation iPods, in stores on Friday, can hold up to 7,500 songs at once — that's about three weeks of continuous music without a repeated song.

The iTunes Music Store is only available to Mac users now. A Windows version is expected soon.