NYT - Breaking - SCOTUS Says File Sharing Services can be sued

[Burma Jones]

Justices Rule Internet File-Sharing Services May Be Sued for Encouraging Illegal Sharing of Music and Movies

[TransitJohn]

1. Expected nothing less.

Gotta protect corporate profits.....even if it goes against that whole "innocent until proven guilty" doctrine.

[Zynx]

2. Sued for advertising or sued for existing?

Both were issues in the case.

[KurtNYC]

30. Or sued because it is the internet?

A radio station says they will play a certain song next. Listeners can cue up recording devices and record it. Why isn't the radio station guilty of facilitating that crime?

The telephone system is used for a variety of crimes - fraud, extortion, threats. Why aren't phone companies liable for their part of these crimes?

Kinko's has locations all over the country, some open 24 hours a day. Am I to believe that everything people take in there to copy is either a) public domain or b) something they own and are making a fair-use copy of?

A P2P netowrk has potentially legal uses - sharing of public domain files/music, distribution of political speech (in MP3 format), promotion of unsigned bands or by bands who make one song available to promote a new album or concert tour.

[Quetzal]

3. Shit

Court: File-Sharing Services May Be Sued

WASHINGTON - Internet file-sharing services will be held responsible if they intend for their customers to use software primarily to swap songs and movies illegally, the Supreme Court ruled Monday, rejecting warnings that the lawsuits will stunt growth of cool tech gadgets such as the next iPod.

The unanimous decision sends the case back to lower court, which had ruled in favor of file-sharing services
Grokster Ltd. and StreamCast Networks Inc. on the grounds that the companies couldn't be sued. The justices said there was enough evidence of unlawful intent for the case to go to trial.

File-sharing services shouldn't get a free pass on bad behavior, justices said.

more...

http://news.yahoo.com/news?tmpl=story&u=/ap/20050627/ap_en_bu/scotus_file_sharing_4

[Zynx]

4. "Intent" - interesting ruling

Intent is always a tricky thing in law.

However, the entertainment industry will love this because they can afford to drag file-sharing services into court, while the file-sharing services can't possibly afford it.

[Massacure]

26. Grokster makes large sums in avertising don't they?

I'm sure they have a good amount of legal funds.

[Halliburton]

45. Mark Cuban says he is willing to help with their legal fees...

So I don't think money will be a huge problem.

[catzies]

50. Mark Cuban is frickin AWESOME. He produced the Enron movie!!

Because he said the truth should be told about those crooks so it couldn't happen agin.

:yourock: Mark Cuban!

[Renew Deal]

5. I think that's reasonable.

If it's illegal, then there is probably an injured party. It's consistent with our laws.

[Roland99]

14. And does anybody *really* think apps like Napster, bittorrent, etc.

are *not* intended for the sharing of music and movies?

[merwin]

25. I use bittorrent to download legal items all the time. In fact, it's

wonderful for things like downloading Linux distributions.

[mccoyn]

34. Please stop throwing in bittorrent.

This is a tool that allows someone with a limited bandwidth to provide a large amount of data to a lot of people. If this isn't a great tool for activists, I don't know what is.

Bittorrent is very useful, but it is always thrown in with many services that are illegal just because they use it. By that logic, the internet and computers should all be shut down because they can be used to steal music. They don't have the intent that the file sharing companies clearly do (at least it will need to be proven to be successfully sued).

[Roland99]

38. The majority of times I've seen it mentioned is for downloading movies,

software, TV shows, etc.

[merwin]

48. Who are the people you hear/see/read mentioning it?

There are a hell of a lot of sites carrying legitimate bittorrent files.

I can tell you that the last 50 times someone mentioned guns to me, it was regarding people getting killed by them. That doesn't mean that the primary use of a gun is to kill people.

[Roland99]

52. Various tech forums and off-topic forums and such.

[shanti]

67. i'm not understanding your logic

so....the primary use of a gun is not intended to kill people? news to me.

[dave123williams]

6. Hmmm. I'm sure the Justices suggested an enforcement scheme...

For a world-wide P2P network that isn't going *anywhere*. The genie's already out of the bottle.

Too late, SCOTUS.

[Zynx]

7. Actually, the enforcement scheme is simple - lawsuits

Which of these services can afford multi-million dollar legal bills? That's what being sued by Sony et al. means.

[Occulus]

18. Which of these services can be killed off by lawsuits?

You can't sue a decentralized open source software application.

[VegasWolf]

40. How are you going to sue a cheap NT server in a Korean basement?

Enforcement is impossible.

[wakeme2008]

8. That's what I am thinking myself

there is no central site in the current p2p networks. They probably could force people like Limewire to no longer produce their product IN THE USA....

[Occulus]

29. As I hinted in an earlier post, though,

lots of these applications are open source.

There is no way, short of making the very software itself illegal (which would also outlaw part of the structure of the net itself, lol), that these networks are going away. The open source genie is so very very much out of the bottle that it's pointless to try.

What the RIAA et al need to do now is find a way to make money themselves out of a thing free to the end user. I suggested a way in still another post on this thread.

Of course, they'll do nothing of the kind.

[VegasWolf]

42. You are exactly correct. The only centralized part of the system is

the tracker that keeps the hash tables. The trackers are often
in the Netherlands. The rest of the files are spread in pieces all over
the world.

[dave123williams]

63. Yep; a p2p network is nuclear-weapons proofed. SCOTUS can stop it?

I don't think so.

[Bluzmann57]

9. A question for file sharers out there

Are the artists making any money at all off of all the people sharing their copyrighted music for free? I think the answer is no. These musicians should be compensated for their ability, they shouldn't be expected to do it for nothing. That's why we have copyright laws and such. Why the outrage over suing illegal file sharers?

[Kitsune]

10. As I understand it, musicians make almost squat off of CD sales.

The real money is in the tour.

[merwin]

27. Yes, musicians make nothing on CD sales. Those profits go to the record

companies. That's why you don't hear the artists yelling about it all the time (minus the couple whiny ones *ehem* Metallica).

The artists make their money on concerts and sales at the concerts. The only instance where the artist keeps the bulk of the money off of CD sales is when they are bought at a concert.

[youspeakmylanguage]

43. It depends on the contract...

If a band or artist signs a crap contract and receives a heft advance on future record sales, then yes, they won't make a lot of money off of future sales.

If they sign a good contract, then they will get a heft chunk of the record sales.

Either way, pirating the music is illegal.

[merwin]

47. 99.9% of the bands that get signed get crap contracts. Unless you're

the Rolling Stones, etc, you're basically screwed. The record companies promise millions of dollars and then make you pay for everything so by the end of it your share comes out to jack squat and they make millions.

Here's a good article that describes it well:
http://www.austinchronicle.com/issues/vol17/issue41/music.labels.html

[youspeakmylanguage]

49. It's simply a matter of holding out or going with a smaller label...

Friends of mine are in a band and they have turned down 4 major label contracts because the terms were crappy. They have a contract with Budweiser and are producing their own music online. Not sure how much money they're making, but it's enough to make the band a full-time job.

Which, again, has nothing to do with illegally pirating music.

[merwin]

51. I'm not talking about pirating music. I was responding to the assumption

that the artists get hurt by it.

The problem with holding out or going with a small label is that:
1) Most people don't have the money to hold out (it takes money to live without making any money) unless they are doing it as a hobby, in which case there's not too much of a chance of getting on a major record label anyways.
2) Small labels are nice and all, but how many bands can you name on the radio that on small labels?

The number of bands that end up making any decent amount of money off of selling records is probably similar to the number of people that win the lottery.

The truth is that the record industry is artificially inflating prices of CD's in order to make record profits, while at the same time not paying the artists what they deserve. In fact, usually it's not even enough to do any more than break even (if that).

What's even crazier is that they are trying to sell electronic copies for 99 cents a song. which basically comes out to the same price as buying it in the store, except you don't get the CD.

No, pirating music may not be legal, but look at the people it's affecting. It's affecting people who are making billions of dollars a year in pure profit off of screwing you, the consumer, out of your hard earned dollars simply because they can.

[youspeakmylanguage]

54. My favorite trance DJ, Tiesto, puts out CDs on a small label in...

...the Netherlands. He is also one of the biggest DJs in the world, rated #1 a few years ago.

I don't listen to commercial radio or MTV so I couldn't tell you anything about what's being played. All I know is what I've learned from the professional musicians I know first-hand. All of them are either on small labels or are producing their own music. Aside from working as record producers, they live fairly simple lifestyles and can play and produce music full-time. Anyone who pirates their music instead of purchasing the music directly from them is taking food out of their mouths and I have a MAJOR beef with that.

I'm not talking about pirating music. I was responding to the assumption that the artists get hurt by it.

Your original post was in response to a justification for illegally pirating music. Since you replied that in your opinion most musicians are bound to draconian major label contracts, it's natural to assume you are offering this as a response to the original question and are defending file sharing.

[merwin]

57. My original post was in response to this statement:

"As I understand it, musicians make almost squat off of CD sales.",
not on how to justify pirating illegal music. If I had wanted to reply to the person talking about pirating, I would have replied to him/her post directly instead.

If I really enjoy a band that's on a major record label and want to support them, I will go to their concerts. That is the only way to support them without giving 90%-95% of your money to the record label. If they're on an independant or small label, I'm fine with supporting them by buying CD's.

[youspeakmylanguage]

58. Cool. I just wanted to make sure you were either for or against...

...an illegal activity. I'm guessing you're taking the Robin Hood approach to justifying it.

[merwin]

59. That's pretty much where I sit on the issue.

There's a point at which the laws and cheating becomes absurd, immoral, and indecent. The consumer has no legal routes to change this when they live in a corporatist government.

Think prohibition... there was no way in hell that individuals could do anything about that.

[Occulus]

65. Does Tiesto legally obtain the rights to what he uses

in his remixes?

[youspeakmylanguage]

70. LOL...

...when you are one of the most prominent DJ's in the world, artists bend over backwards to have you play their tracks. I read in an interview that Paul Oakenfold gets close to 200 vinyl singles a week in the mail from artists hoping he will mix their music into his next set.

Unlike the pirates, these DJ's have contracts with legitimate businesses and their mix CD's are legitimate commercial products.

Try again.

[Beaverhausen]

55. and people work at record companies, as well as manufacturing plants,

record stores, etc.

Stealing is stealing. I applaud this decision.

[mccoyn]

36. Not all profits are money.

How many bands can pull off a national tour without the widespread advertising provided by a record deal?

I will agree that record companies seem to take more than their fair share. Lets face it though, a band with a record deal will do much better than one without.

I'm still waiting for that band that gets all their advertising through the internet and file sharing.

[Nostradamus]

41. most musicians end up OWING money on recorded music

musicians have to pay recording costs out of ROYALTIES, not sales.

[habitual]

12. Poor Starving Musicians

It is my understanding that Christina A. is so thin because she chooses, not because she can't afford food due to file-sharing. And as for actors. And remember we are talking about the RIAA, MPAA. They represent major money makers not the small time artist.

[renaissanceguy]

16. Actually, there are artists encouraging file sharing

Think of it this way... free files = more people hear your music = higher attendance at performances, where the artists make their money. Artists hardly get anything from record sales.


http://www.cafepress.com/liberalissues/466053

[merwin]

60. Exactly. That's why you hear a lot about it from the record companies, and

bands like Metallica that have killer record deals, but not from the bands that don't have a very good record deal.

[Occulus]

19. Is there still a tax in effect on blank media?

It was my understanding that there was a fee built into the pricing of blank media (CDs, DVDs, etc) which was intended to compensate content producers for the possible use of that media to copy films, music, etc.

Or was that Canada?

[mccoyn]

37. That is Canada -nt.

NT = No Test.

[AndyTiedye]

20. I Have No Problem With Paying for Music

But file-sharing services have been useful in tracking down rare, out-of-print stuff, and they are a way for unknown artists to get
their stuff out there. They provide a way to listen before you buy.
Without them most people are dependent on radio airplay to find new
music. That is the real reason that Big Entertainment wants to shut
down file-sharing. They are losing their ability to filter what we
hear. It's supposed to be about who you blow, not how good your music is.

More musicians should adopt the Grateful Dead business model. They
allowed taping and tape trading, and even encouraged it. This
enormously increased their popularity and never seemed to hurt their
album sales at all.

I have no problem with paying for music, I own almost 2000 CDs
as well as hundreds of records.

[Occulus]

24. hmmm... "rare, out-of-print stuff,"

You know, I've thought and thought about that angle of this, and the more I think on it the more certain I am that these mega-monopolistic media companies (MMMCs, imagine that) wouldn't care that the media is out of print. Their only concern is whether they still hold a copyright on the material, and whether they have been "fairly" compensated- in their minds, as much as they want out of it- for the work.

Here's an intersting link about the RIAA's developing (2002) position regarding secondhand music sales (!). This is the kind of action that makes me totally discount the RIAA/MPAA position on filesharing, by the way, and makes me believe what they are trying to do regarding their copyrights is almost a criminal use of those rights.

http://www.signonsandiego.com/news/business/20020614-9999_1b14usedcds.html

They may have abandoned this stance, as I looked for other, more recent links, and my cursory Google search didn't pick up anything else that was really relevant. I know I heard about this position from multiple sources at the time, however. Maybe I was using the wrong search terms.

There does come a point when the pursuit of profit becomes a misuse of one's own copyright, and I think that is a whole other question that needs to be addressed: how and when does one cross the line and misuse one's copyright?

[Occulus]

22. The question is not whether they are MAKING money.

The question is whether they are losing money in a quantity sufficient to constitute a measurable loss. To date, I have seen no reliable studies indicating that there has been any impact at all.

The only studies I've seen or heard of come from the very industry which wishes to get rid of file sharing. What they do not realize is that this is completely impossible at this juncture.

I watched the movie "Epoch" on the Sci-Fi channel on Saturday (go ahead and look at the schedule; it was on). I wanted to watch "Epoch: Evolution", which was on immediately after and is the sequel I haven't seen. I had to go to work, so of course I missed the broadcast I have paid for and wanted to asee but could not.

Because I am a subscriber, do I have the right to download a copy of the same movie I would have seen, but missed? Keep in mind, the SCOTUD already ruled that time-shifting is an acceptable application of 'fair use'; this was the decision that kept the record buttons on VCRs back in the '80s.

To me, that is an acceptable use, because I have already paid the subscription fees for the network the video was broadcast on. Not only that, but I also had a legitimate private use for doing so. Not only that, but the material in question was available legitimately for my viewing pleasure, but I was unable to utilize in the common way my right to time shift the recording (broken VCR and the rental was out); using the PC was the only option.

I'd like to know why the industry doesn't release on the filsharing networks ad-supported free recordings of their works. We already know internet ads generate revenue, so why not (for example) music videos and movies that play at, say, 512x384 resolution, with ads ringing the frame of the video (which would appear as part of the picture itself), bringing the total size up to 640x480.

Perhaps they could somehow use numeric information generated by the presence of the ads as half of a key that unlocks the video, thereby making the ads a necessity to play back the free version. This, of course, would require a proprietary player, one that could be bundled into the free version that people download.

There are other solutions here, solutions that could utilize filesharing the way people use it and expect it now to generate revenue for the vast majority of the traded material. Certain Parties don't even want us to consider those options.

[depakid]

32. I think you haven't done much analysis

there have been several studies that show file sharing actually increases the aggregate sales of music by allowing sampling.

If you looked to the broader issues, you'd see that in today's era of payola (and radio consoldation) where many (especially newer) artists can no longer get airplay- and where the oligopoly control the vast majority of record profits (the artists aren't getting jack as a percentage of gross sales)- file sharing is a good thing- for artists, especially- but even for the record companies- and certainly or consumers.

There's a reason CD sales have been in decline for several years- and it's got nothing to do with the file sharers.

[mccoyn]

44. "there have been several studies" Link?

Do you have a link or something to give further detail on these studies?

[depakid]

46. Simple google seach- "economics" "file sharing"

Here are a couple of 1st page results::

File-Sharing, Sampling, and Music Distribution

"The use of file-sharing technologies, so-called Peer-to-Peer (P2P) networks, to copy music files has become common since the arrival of Napster. P2P networks may actually improve the matching between products and buyers - we call this the matching effect.

For a label the downside of P2P networks is that consumers receive a copy which, although it is an imperfect substitute to the original, may reduce their willingness-to-pay for the original - we call this the competition effect.

We show that the matching effect may dominate so that a label's profits are higher with P2P networks than without.

Furthermore, we show that the existence of P2P networks may alter the standard business model: sampling may replace costly marketing and promotion. This may allow labels to increase profits in spite of lower revenues."

If you can handle harder core traditional econ models, here's a nice empirical paper:

The Effect of File Sharing on Record Sales

"We find that file sharing has no statistically significant effect on purchases of the average album in our sample....

If we are correct in arguing that downloading has little effect on the production of music, then file sharing probably increases aggregate welfare. Shifts from sales to downloads are simply transfers between firms and consumers.

And while we have argued that file sharing imposes little dynamic cost in terms of future production, it has considerably increased the consumption of recorded music. File sharing lowers the price and allows an apparently large pool of individuals to enjoy music. The sheer magnitude of this activity, the billions of tracks which are downloaded each year, suggests the added social welfare from file sharing is likely to be quite high."

[mccoyn]

62. Neither of those links support your claim.

There have been several studies that show file sharing actually increases the aggregate sales of music by allowing sampling.

The first link presents a theory that it might increase sales, but doesn't provide evidence to back it up. It hardly shows "file sharing actually increases the aggregate sales," just that it may. The word may is used 41 times in 23 pages. This guy is just suggesting a theory.

The second link shows that file sharing doesn't affect sales, not that it actually helps. This study falls short of your claim and actually disproves it. Check out the first line of the conclusion.

We find that file sharing has no statistically significant effect on purchases of the average album in our sample.

[Occulus]

64. it is incumbent upon the complainant to prove the case

And the RIAA and MPAA have not done so. They are the ones who must prove a loss.

They have not done so.

[mccoyn]

69. Thats not the argument being made.

"several studies that show file sharing actually increases the aggregate sales of music by allowing sampling"

This statement is false, pure and simple.

[Zynx]

66. I have seen actual sales figures in the newspaper that contradict that.

Indeed, sales have dropped a great deal. Also, these services don't just share music, but often are used to steal video games, movies, and large ticket application software.

[cestpaspossible]

61. I only buy music from musicians that I've already heard.

I would never spend 15+ bucks on a gamble to see if I liked someone's music just based on the cover of the CD.


The record companies just want total control, so the only new music you hear is what they've decided to promote through radio payola.

But music is a more powerful force than commerce, and the record companies are merely extending the life of a doomed business model with these type of lawsuits.

[Name removed]

11. Deleted message

Message removed by moderator. Click here to review the message board rules.

[realcountrymusic]

13. Good

That it was 5-4 is the only disappointment.

eom

[cosmicdot]

56. actually, it looks like it was a 9 to 0 decision

"The 9-0 ruling may be the most important copyright decision of the Internet era."


12:44 PM PDT, June 27, 2005

Justices Rule File-Sharing Services Can Be Held Liable for Theft
By David G. Savage, Times Staff Writer


WASHINGTON -- The Supreme Court gave the entertainment industry a new legal weapon for fighting Internet privacy, ruling today that Web companies that encourage computer users to download free copies of music or movies can be held liable for the industry's losses.


http://www.latimes.com/technology/la-062705grokster_lat,0,5397050.story?coll=la-home-headlines

[ikri]

15. The RIAA and MPAA

Have wanted this decision for decades.

If a piece of software can encourage piracy then audio hardware manufacturers can be sued for encouraging people to copy cassettes, computer hardware manufacturers can be sued for making CD or DVD writers. The MPAA can finally take Sony to court over the despicable Video Recorder.

[Massacure]

28. But it doesn't change the fact that the MPAA would lose to Sony.

The Supreme Court mentioned that the lower courts misinterpreted the Sony ruling.

[haktar]

17. rotflmao

Do they really think this would help anything?

The people will simply switch to networks that are not server based like Gnutella.

To make copying unlawful or DRM doesn't help them at all.

Au contraire:
I bought a lot of Cd's until they decided to produce copy protected Cd's
which are as easily copied than before but started problems to play the original Cd's.
I bought a lot of DVDs until the copy protection was visible in the picture or the DVDs didn't play at all.
Why should i buy DVDs at a unreasonably high price, when i have to illegally get rid of the copy protection anyways to get an undisturbed picture?

They forgot it's the 21st century.

Make reasonable priced Cd's and DVDs and look for quality and not for stupid copy protection and lawsuits, then maybe people are starting to buy the crab again.

:evilgrin:

[Kagemusha]

21. Unlike what Congress tried to pull in the Schiavo case,

this ruling does not mandate Grokster etc. be found guilty. It only says they can be tried.

All this means is they think that the claims that Grokster's no worse than the VCR should be tested in court before a judge, not ruled out of hand as an impossibility at the appeals court level.

Grokster still gets due process.

[haktar]

23. No they will not!

They will sue until grokster is bankrupt. And it doesn't matter if they win or loose.
An example:
Here in Germany i have the right to a private copy but not the right to remove a copy protection. I have a subscription to a Pay TV provider called Premiere. Premiere does anything that the transmitted programs can't be recorded. (Even with an analog VCR). Now i don't use their crabby receiver equipment but better stuff which is BTW perfectly legal.
So now I'm able to even record digitally without breaking a law.
And what happened to several people selling comparable equipment via Ebay?
They got sued, not for recording movies, but for selling equipment where the age protection pin can be switched off !!! (No joke) Probably they wouldn't get away with it, but the lawsuit was so expensive that nobody tried!

This is the way they do it!

It doesn't matter i use bittorent to get my mandrake updates,
I could also theoretically download a movie.

Bit torrent is evil and everybody with an open port 6881 should be in jail. :sarcasm:

[Zhade]

31. Terrible, backwards decision.

P2P can be used for things other than infringement - like a delivery system for the content the corporations sell.

Disappointing ruling.

[nine30]

33. Why don't they now sue Gun manufacturers ..

for manufacturing weapons used in crime ?

[anotherdrew]

39. lol, good point!

[SeanQuinn]

35. I was hoping this wouldn't happen.

I may now have to get ITMS to move to Linux.

[steve2470]

53. METRO-GOLDWYN-MAYER STUDIOS INC. et al. v. GROKSTER, LTD., et al.

http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=000&invol=04-480

[Stockholm]

68. 2nd strange verdict in a short period of time

Do the corporates own the US Supreme Court as well as the media?

Supreme Court Inc. :shrug: