Morpheus loses file-sharing case

October 6, 2006

A federal judge has ruled that Morpheus, the file sharing peer-to-peer site, has contributed to massive copyright infringement by encouraging millions of people to illegally share music, movies and other protected works.

U.S. District Judge Stephen Wilson found that StreamCast Networks, the distributor of Morpheus, had constructed a business model that relied on massive copyright infringement and did nothing to stop the trading of copyrighted materials.

The case, which began in 2001, was a legal confrontation between major Hollywood content owners and StreamCast, based in Woodland Hills, CA.

The Morpheus decision came after the U.S. Supreme Court’s Grokster decision that found companies can be held liable for distributing software used to violate copyrights. StreamCast, the only P2P network to continue litigation after the Supreme Court decision, said it might appeal.

Wilson did not determine what damages StreamCast must pay. The company, however, could be liable for as much as $150,000 for each copyrighted work illegally shared online.

Morpheus allows millions of users to scan one another’s hard drives for songs, video clips and games that they can transfer to their own computers. Proponents of P2P technology say it has many legitimate uses, but court rulings are finding P2P companies can be held liable for copyright infringement.

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