Software firms face file-sharing liability

June 27, 2005

US Supreme Court holds companies responsible for end users' infringement in Grokster case

Companies manufacturing and distributing file-sharing software were today held liable for the copyright infringements carried out with the software by end users.


The Supreme Court unanimously held that a person who distributes a device with the object of promoting its use to infringe copyright that went beyond mere distribution with knowledge of third party action is liable for the resulting acts of infringement by third parties using the devide, regardless of the device’s lawful uses.


The unexpected ruling by the US Supreme Court leaves file-sharing networks open to further legal challenge. The Court had widely been expected to back the file-sharers case based on earlier precedents in relation to the sale and distribution of video tape recorders.


The ruling is a victory for recording companies and film studios in what is widely seen as one of the most important copyright cases in years.


Andrew Lack, chief executive of Sony BMG, said his company would pursue those who failed to comply with the law and Dan Glickman, president of the Motion Picture Association of America, said: “Today’s unanimous ruling is an historic victory for intellectual property in the digital age, and is good news for consumers, artists, innovation and lawful Internet businesses.”


In the UK, BPI Chairman, Peter Jamieson, said: “This decision makes it clear that companies who distribute file-sharing software to promote and profit from the stealing of music are liable for their actions.  It is good news for everyone who loves music.”


BPI General Counsel, Geoff Taylor confirmed that the BPI’s litigation campaign against UK internet users who upload music without permission on to filesharing networks will continue. “We will continue to identify and bring legal actions against individuals in the UK who upload copyright music without permission onto any peer-to-peer network.”

However, representatives from the technology industry are worried that the ruling could lead to uncertainty about the legality of new products and services. Gary Shapiro, president of the Consumer Electronics Association, said: “The court has done little to provide a clear path for legitimate innovators and manufacturers to avoid lawsuits related to copyright infringement over legitimate products and services.”


For the 5RB case report and a link to the judgment, click here.


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