Companies that make peer-to-peer file-sharing software face the prospect of a legal blitz after a US Supreme Court ruling that they can be held responsible for copyright infringements by users.
The ruling was welcomed by the entertainment industry as a victory for copyright holders. But some experts warn that it could discourage technological innovation and may drive illegal file-trading further underground.
Peer-to-peer (P2P) software lets users copy music and movie files from each others鈥� computers and the entertainment industry says the practice costs it billions of dollars in lost revenue every year.
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Until now, the entertainment industry has pursued legal action against individual file-traders, but this strategy has not prevented millions of people continuing to share files and has also generated some negative publicity. But the way is now clear for them to target the companies behind the P2P networks instead.
Legitimate uses
The landmark ruling, issued on Monday, stems from legal action brought against two US software firms, Grokster and StreamCast, in 2001, by 28 entertainment companies, including MGM, Walt Disney, EMI and Time Warner.
Two lower courts had previously ruled that the Grokster and StreamCast could not be held responsible for copyright infringement carried out using their software. This was based on a precedent set by another Supreme Court decision, in 1984, which absolved Sony from liability for copyright infringement carried out using Betamax video tapes, because the tapes also had legitimate uses.
Although P2P networks also have legitimate uses, the Supreme Court ruled that Grokster or StreamCast made no effort to stem illicit use of their software.
Protecting livelihoods
鈥淭here is no evidence that either company made an effort to filter copyrighted material from users鈥� downloads or otherwise impede the sharing of copyrighted files,鈥� Justice David Souter wrote in the Supreme Court鈥檚 majority opinion. 鈥淓ach company showed itself to be aiming to satisfy a known source of demand for copyright infringement.鈥�
鈥淭he Supreme Court has addressed a significant threat to the US economy and moved to protect the livelihoods of the more than 11 million Americans employed by the copyright industries,鈥� said Mitch Bainwol, chairman of the Recording Industry Association of America.
Aain Levy, CEO of EMI Music added that his company would 鈥減ersist in the aggressive pursuit of businesses and individuals who engage in or facilitate the mass theft of copyrighted works鈥�. And as well as pleasing entertainment companies, the ruling should also provide a boost for legitimate music download services, such as iTunes and Napster.
Era of uncertainty
But activists and programmers worry that if the decision results in a storm of legal suits, it will have a negative impact on commercial innovation by deterring companies from creating products that might potentially be used for copyright infringement.
Fred von Lohmann, senior intellectual property attorney at the San Francisco-based Electronic Frontier Foundation, says the decision will 鈥渇uel a new generation of entertainment industry lawsuits against technology companies鈥� and consequently 鈥渦nleash a new era of legal uncertainty on America鈥檚 innovators鈥�.
Adam Langley, a P2P programmer in the UK, says the ruling will undermine efforts to gain funding for new ideas. 鈥淵our investors are going to need pretty good assurances about the legality of the venture, and that鈥檚 very much up in the air right now,鈥� he told 快猫短视频. 鈥淣o one knows where the line is and venture capitalists don鈥檛 want to be within 100 miles of anywhere it could come down.鈥�
Ian Clarke, the programmer behind an experimental, anonymous file-trading system called Freenet, agrees that 鈥渕any new innovations may be killed off just by the threat of legal action, even if the threat is baseless鈥�.
But he adds that new forms of P2P networks will flourish in order to support demand. 鈥淥ne way or another, this ruling is full of loopholes that will be used by some innovators to create technologies to replace today鈥檚 file sharing networks,鈥� Clarke told 快猫短视频. 鈥淭he victims will be tomorrow鈥檚 innovators.鈥�
