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US courts probe legality of P2P sites

File-swapping appeal centres on Betamax case

Questions about two copyright cases and two technologies, separated by almost twenty years of technological innovation, dominated an appeals court hearing yesterday that is pitting peer-to-peer (P2P) file sharing software companies against leading entertainment industry groups.

Speaking before a packed courtroom, a three-judge panel of the US Circuit Court of Appeals focused on whether technology companies can be held liable for the misuse of their products.

"It's anybody's game. It's impossible to predict how they might rule," said Jonathan Lamy, a spokesman for the Recording Industry Association of America (Riaa) who was at the hearing.

The Riaa is one of the plaintiffs along with the Motion Picture Association of America (MPAA) and the National Music Publisher's Association of America (NMPA). The groups are suing P-to-P software companies Grokster and Streamcast Networks (which makes the Morpheus P-to-P software).

At the heart of the legal debate, participants agree, is a precedent set in the 1984 Sony case, commonly referred to as the "Betamax case", after Sony's home video recording technology.

In that case, the Supreme Court ruled against Universal City Studios, deciding that Sony could not be held liable for violating the copyright of media companies because the Betamax technology had "substantial non-infringing uses" that did not result in copyrights being violated.

In the yesterday's hearing, lawyers for Grokster and Streamcast cast their clients' software as a latter-day Betamax: technology that can be used for illegal infringement of copyrighted material, but which has many other, legal applications.

"It was clear that the court understood the parallels between this case and the Sony Betamax case," said Fred von Lohmann, senior intellectual property attorney at the Electronic Frontier Foundation, who represented Streamcast before the court.

Von Lohmann and others see the case against P-to-P companies as an effort by the entertainment industry to overturn the precedent set in the Betamax case, which would give copyright holders far greater authority to impose restrictions on the use and development of new technology.

"We're not trying to shut down these (file sharing) services or halt P-to-P. We just want them to respect the copyrights of our members," said Riaa's Lamy

The entertainment companies see software like Grokster and Kazaa in the same light as Napster, the first file-sharing network that, in a 2001 ruling, was found to violate the rights of copyright owners.

Whatever the outcome of the Ninth Circuit Court of Appeals ruling, the P-to-P case, or another like it, is likely headed for the Supreme Court in the next five years, Von Lohmann said.

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