US federal judge Stephen Wilson ruled that peer-to-peer network creators Streamcast and Grokster were not liable for copyright infringements that occur using their software, a decision which overturns previous court rulings.
"Sharman Networks Limited, owner of Kazaa Media Desktop, applauds Judge Wilson's decision in his ruling that file-sharing software is legal," said a spokesperson for Sharman Networks in a statement. "Since acquiring Kazaa Media Desktop, Sharman Networks built it to be a legitimate, powerful and efficient distribution channel for rights managed content. Our legal team is currently evaluating the ruling's significance."
Sharman Networks representatives are scheduled to appear in Judge Wilson's court on Monday in the United States for oral arguments in plaintiff's motion to dismiss Sharman's counterclaims against the entertainment industry. Sharman, which is currently being sued by the music industry for allegedly assisting copyright infringers, claims that major entertainment companies have colluded to drive potential online rivals out of business.
Sharman has said it wants to set up a legal peer-to-peer music distribution system that reimburses copyright holders, but has been thwarted by music companies who refuse to contemplate such a system. Paid-subscription sites are now available, but services had to fight hard throughout 2002 to win music licenses, and the right to offer services such as CD burning.
Michael Speck, the manager of Music Industry Piracy Investigations, told ZDNet Australia the decision was a "serious concern".
"The decision has more to say about how the case against the respondents was run than the principles, in my view," said Speck. "Unless it's redressed by [law] or a more thorough prosecution it presents a blueprint for Internet infringement, and it's a serious concern."
After reading this article and one from Reuters where the "RIAA" was quoted as saying "We're not going to change behavior overnight. The only way we can measure this is to see if fewer people are offering files on Grokster and Kazaa," I went out to the Kazaa sight and looked at the license agreement (Yes, as a musician and a programmer I still prefer CDs). I am surprised that Kazaa has not turned around and filed a DMCA complaint against the RIAA as it is clearly violating the law if it is using Kazaa to determine if people are offering copyrighted material using the software. While the issue as to whether or not Kazaa or Verizon has violated the law that remains to be seen, but if the RIAA publicly states it is using Kazaa in direct violation of the “end user license agreement” then they put their proverbial foot in it.