In a decision that makes it harder for content producers to crack down on illegal copying of their works,
federal judges Thursday held that Grokster and StreamCast Networks are not liable for copyright infringement when individuals use their file-sharing software to illegally swap copyrighted video, movies and music.
The Ninth Circuit Court of Appeals decision that software companies are not vicariously liable for the copyright infringement of the users of the particular software at issue upheld a lower court ruling absolving the two networks of liability because they don't maintain centralized indexes of files available for sharing.
Grokster and StreamCast systems disburse indexes among users' privately owned computers. In 2000, the same court outlawed Napster's centralized system as illegal.
Hollywood had argued that distributors of Grokster And StreamCast software should be liable for facilitating copyright infringement when the software is used for illegal swapping. But the court said the networks have clear non-infringing uses--they are valuable tools for sharing public domain content--and that general knowledge by the software companies that they were being used to violate copyright was not the same as knowledge of specific violations or the ability to control such violations, both of which could have triggered liability.
Parties on both sides of the issue found something to praise in the ruling. "Today’s decision should not be viewed as a green light for companies or individuals seeking to build businesses that prey on copyright holders’ intellectual property," said Jack Valenti, chief executive of the Motion Picture Association of America. "Copyright theft is still illegal and the court reiterated that users of file-copying networks that illegally traffic in copyrighted music, motion pictures and television programs are not 'sharing,' they are stealing."
An advocacy group for consumer rights said the decision was "essentially correct." Public Knowledge said the judges took "a broad historical perspective about disruptive technologies" and cautioned "against too-quick regulation of those technologies."