The Supreme Court has decided to consider whether two Internet file-sharing services may be held responsible for their customers' online swapping of copyrighted songs and movies, the Associated Press reported.
Justices will review a lower ruling in favor of Grokster and StreamCast Networks, which came as a blow to recording companies and movie studios seeking to stop the illegal distribution of their works.
The appeal by Metro-Goldwyn-Mayer Studios and other entertainment companies said that the file-sharing is “inflicting catastrophic, multibillion dollar harm on petitioners that cannot be redressed through lawsuits against the millions of direct infringers using those services.”
Grokster and StreamCast, in their filings, disagree. In a prepared statement, the companies said that once the software has been downloaded by users, they have no involvement in, nor ability to control how it is used.
The 9th U.S. Circuit Court of Appeals in San Francisco ruled in August that file-sharing services were not responsible because they don't have central servers pointing users to copyright material.
It reasoned that the firms simply provide software that lets individual users share information over the Internet, regardless of whether that shared information is copyrighted.
The big-money fight has drawn the support of dozens of companies in the entertainment industry as well as attorneys general in 40 states, who fear the file-sharing software will encourage illegal activity, stem the growth of small artists and lead to lost jobs and sales tax revenue.
Civil libertarians, meanwhile, have warned that a defeat for Grokster and StreamCast could force technology companies such as Microsoft to delay or kill innovative products that give consumers more control.
The 9th Circuit stated that history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine, or an MP3 player. Thus, it said, the courts should exercise caution.
If the lower ruling is upheld, the entertainment industry would have to take the more costly and less popular route of going directly after millions of online file-swappers believed to distribute songs and movies illegally.
Arguments are expected in the spring, with a ruling by July.