US Supreme court rules against file sharers
The US Supreme Court has ruled that Internet file-sharing networks can be held liable when their users copy music, films and other copyright protected works without permission.
The justices set aside a US appeals court ruling that the peer-to-peer (P2P)networks cannot be held liable for copyright infringement because they can be used for legitimate purposes as well.
“We hold that one who distributes a device with the object of promoting its use to infringe copyright ... is liable for the resulting acts of infringement by third parties,” Justice David Souter wrote for the court.
The case had been closely watched by the entertainment and technology industries as a test of copyright law in the computer era. It was considered the most important copyright case to reach the Supreme Court in more than two decades.
Online networks like Grokster and Morpheus allow millions of computer users to copy music and movies for free from each others' hard drives.
Recording labels and movie studios said the copying has hurt their sales. Revenues in the recording industry have plunged by about 25 percent since file-sharing networks emerged in 1999, though the industry posted a slight sales increase last year.
The appeals court cited a landmark 1984 Supreme Court ruling that Sony Corp. could not be held liable if users of its Betamax VCR copied television shows without permission because it also could be used for legitimate purposes such as taping a show to watch later.
The entertainment industry appealed to the Supreme Court after the appeals court ruling in the file-sharing case, and the US Justice Department supported the appeal. The ruling was a victory for them.
Technology companies argued that holding the networks liable would stifle creativity and deter inventors from developing new products.
The entertainment industry managed to shut down the first file-trading network, Napster. But the appeals court found that Grokster differed significantly from Napster because its software permits users to share files with one another directly rather than going through a central computer server.