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Court Rules in favor of Online Privacy

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Court Rejects Effort to Identify Music Downloaders


Friday, December 19, 2003


WASHINGTON ? The recording industry can't force Internet providers to identify music downloaders, a federal appeals court said Friday in a major decision shielding online privacy while undercutting the industry's anti-piracy campaign.




The ruling does not legalize distributing copyrighted songs over the Internet, but it will greatly increase the cost and effort for the Washington-based Recording Industry Association of America (search) to track such activity and sue those who are swapping music online.


The U.S. Court of Appeals for the District of Columbia (search) overturned a trial judge's decision to enforce copyright subpoenas, one of the most effective tools used by the recording industry. The subpoena power was established by a law passed before the explosive growth of swapping music online.


"It's an incredible ruling, a blow for the little guy," said Bob Barnes, a grandfather in Fresno, Calif., who was targeted by one of the earliest subpoenas from the Recording Industry Association of America but isn't among the hundreds who have been sued so far.


? Raw Data: Opinion, RIAA v. Verizon (pdf)


The appeals court said the 1998 copyright law doesn't cover popular file-sharing networks used by tens of millions of Americans to download songs. The law "betrays no awareness whatsoever that Internet users might be able directly to exchange files containing copyrighted works," the court wrote.


The judges sympathized with the recording industry, which has cited declining profits, noting that "stakes are large." But they said it was not the role of courts to rewrite the 1998 law, "no matter how damaging" the practice of swapping has become to the music industry or threatens to become to the motion picture and software industries.


The chairman of the Senate Judiciary Committee, Orrin Hatch (search), R-Utah, said the court's decision "makes the need for reform of the subpoena process even more urgent."


Sen. Norm Coleman, R-Minn., a prominent critic of the subpoenas, predicted that any efforts to broaden the 1998 law would "face some serious obstacles" in the Senate.


"We clearly have to do a better job of getting law and technology and ethics into better sync," said Coleman.


Legal experts said they did not expect the appeals ruling to affect 382 civil lawsuits the recording industry has filed since it announced its campaign six months ago. It also was not expected to affect financial settlements with at least 220 computer users who agreed to pay penalties from $2,500 to $7,500 each.


Richard Warner, 49, of Petaluma, Calif., paid $4,000 to settle a copyright lawsuit in October over allegations his 17-year-old daughter was illegally sharing more than 1,100 songs. He now wishes his Internet provider had fought against turning over his identity.


"Somebody, somewhere, should have been able to stand up and say, 'Wait a minute, these people are just trying to bulldoze and intimidate people anyway they can,"' said Warner, a wine merchant.


Friday's ruling will make identifying defendants for future lawsuits more difficult and expensive. The ruling forces the recording industry to file civil lawsuits against "John Doe" defendants, based on their Internet addresses, then work through the courts to learn their names.


Cary Sherman (search), president of the recording industry group, said the ruling "unfortunately means we can no longer notify illegal file sharers before we file lawsuits against them to offer the opportunity to settle outside of litigation."


Sherman promised to "continue to defend our rights online on behalf of artists, songwriters and countless others involved in bringing music to the public."


Earlier this week, the recording industry sent letters to the 50 largest U.S. Internet providers asking them to forward written warnings in the future to subscribers caught swapping music.


Details were still being worked out, but if Internet providers agree, subscribers who swap even modest collections of music online could receive the ominous warnings.


The letters demanding an end to the practice would be forwarded without revealing subscriber identities to music lawyers. The warnings would be mailed directly to Internet account holders -- potentially alerting parents or grandparents about illegal downloading in their households they might not know about.


U.S. District Judge John D. Bates had approved use of the disputed subpoenas, forcing Verizon Communications Inc. (search) to turn over names and addresses for at least four subscribers. Since then, Verizon has identified scores of its other subscribers under subpoena by the music industry, and some of them have been sued.


Verizon appealed, and company lawyer Sarah Deutsch called the ruling Friday "an important victory for all Internet users and all consumers."


"Consumers' rights cannot be trampled upon in the quest to enforce your copyright," Deutsch said.


C/O Fox News

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Uh, are you paying for it?


When someone takes something that is sold, its stealing. Its rather simple. "music sharing" is stealing and therefore its wrong.


What erks me the most are all of the "good christians" that steal music. Did you ever hear of thou shalt not steal? Give me a break. It cost money to produce these things, so obviously they're not charging you for a free product you are entitled to, but rather something they make for profit.


We have become a country of thiefs.

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it's much easier to play mp3s on winamp than it is to keep popping in new cds. And, I do some ripping (taking music off cds and putting it on my computer), but that too kinda sucks, and slows my computer down when I do it. Downloading is easier. Hell, half the stuff I download is music I already have on cd. The rest is stuff that I havent heard, or havent heard enough....and if I like it, I buy it. Just like going to cdnow.com and clicking on samples, except I get the whole song, and I can listen to it in much better quality.

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Judge: File-swapping tools are legal


By John Borland

Staff Writer, CNET News.com



Story last modified April 25, 2003, 12:46 PM PDT


A federal judge in Los Angeles has handed a stunning court victory to file-swapping services Streamcast Networks and Grokster, dismissing much of the record industry and movie studios' lawsuit against the two companies.

Read more about file-swapping



In an almost complete reversal of previous victories for the record labels and movie studios, federal court Judge Stephen Wilson ruled that Streamcast--parent of the Morpheus software--and Grokster were not liable for copyright infringements that took place using their software. The ruling does not directly affect Kazaa, software distributed by Sharman Networks, which has also been targeted by the entertainment industry.


"Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends," Wilson wrote in his opinion, released Friday. "Grokster and StreamCast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights."





The ruling is the second major setback to date to the entertainment industry's efforts to keep a tight rein on online file-swapping, following a similiar decision in the Netherlands last year that found that Kazaa was not liable for its users' copyright infringements. If upheld, the decision could lead artists, record labels and movie studios to cast new legal strategies that they have until now been reluctant to try, including bringing lawsuits against individuals who copy unauthorized works over Napster-like networks.


According to the major record labels, file-swapping is a major contributor to declines in music sales over the past few years, a trend that has thrown the industry into disarray. Debt-ridden media conglomerates are now considering sales of their music divisions even as they begin to test paid online music services intended to compete with free file-swapping networks and turn the tide.


Attorneys called the ruling a blow for entertainment and record companies trying to stop the networks used to swap unauthorized copies of their works.


"This is a very serious setback for the record industry and other content industries, because they've uniformly won these cases in the U.S.," Mark Radcliffe, an intellectual property attorney at Gray Cary Ware & Freidenrich said.


While the ruling in no way validates the legality of downloading copyrighted music online, it would shield companies providing decentralized file-swapping software such as Gnutella from liability for the actions of people using their products.


As such, it could provide new leverage for file-swapping companies such as Grokster, Streamcast and Sharman in negotiations with record companies and other copyright holders to license works legitimately. Since Napster's $1 billion settlement offer with the record industry in 2001, file-swapping companies have repeatedly sought an amicable settlement with copyright holders but have been almost universally rebuffed.


The court's ruling applies only to existing versions of the Morpheus and Grokster software. Earlier versions of the software, which functioned slightly differently, could potentially leave the companies open to liability.


A spokeswoman for the Motion Picture Association of America (MPAA) said the copyright holders were deeply disappointed in the decision and would certainly appeal.


"We feel strongly that those who encourage, facilitate and profit from piracy should be held accountable for actions," MPAA spokeswoman Marta Grutka said. "We're hoping that people aren't taking this as an invitation to continue along the path of what is clearly illegal activity."


Recording industry officials said they saw some good in the ruling, but that they too would immediately appeal to the 9th Circuit Court of Appeals.


"We are pleased with the Court's affirmation that individual users are accountable for illegally uploading and downloading copyrighted works off of publicly accessible peer-to-peer networks," said Recording Industry Association of America (RIAA) chief executive officer Hilary Rosen in a statement. "(But) businesses that intentionally facilitate massive piracy should not be able to evade responsibility for their actions."



Wilson's decision comes in the most closely watched Net copyright case since Napster's demise.


The two pieces of file-swapping software affected by Friday's ruling remain among the most popular downloads on the Net, although they operate deep in the shadow of market leader Kazaa. Morpheus--once the undisputed leader--has fallen to about 120,000 downloads per week, according to Download.com, a software aggregation site operated by News.com publisher CNET Networks. Kazaa, by contrast, was downloaded more than 2.7 million times during the past week.


The RIAA and the MPAA sued Streamcast, Grokster, and the original parent company of Kazaa's software in October 2001, and the case has been making its way slowly through court since that time.


In late 2002, both sides asked the judge for summary judgment, or a quick ruling in their favor before going to a full trial. Wilson's decision in favor of the file-swapping companies Friday was tied to that months-old series of requests.


The decision does not directly affect Kazaa, at least not immediately. At the time that Grokster and Streamcast were arguing for summary judgment, Wilson had not yet ruled that the Australia-based Sharman Networks could be sued in the United States.


Sharman is scheduled to meet with RIAA and MPAA attorneys in court on Monday, to argue over whether its counterclaim against the record labels and movie studios should be dismissed. Friday's ruling, however, could change the direction of that hearing.


The judge's surprise ruling marked the first validation of an argument that file-swapping supporters have been making since Napster's first controversial arrival. Peer-to-peer file-trading is a technology that can be used for activities well beyond copyright infringement, and the technology should not be blocked altogether to stop solely its illegal uses, these backers have said.


In making that argument, the judge looked back to the landmark 1984 Supreme Court ruling that upheld the legality of Sony's Betamax videocassette recorder (VCR). That decision helped establish the doctrine of "substantial noninfringing use," which protects technology providers that distribute products--like the VCR or photocopier--that can be used for both legal and illegal purposes.


"We are absolutely very proud of this judge for having the unusual capacity to be able to grasp the technology and its future benefit to taxpayers and shareholders around the world," said Wayne Rosso, president of Grokster. "Technology is usually way ahead of courts and legislature. The fact that judge was able to acutely comprehend (this technology) is a credit to the legal system."


Not like Napster

Much of Wilson's ruling hung on the technological differences between Napster and the newer, decentralized file-swapping services.


Napster's service opened itself to liability for its users' actions by actively playing a role in connecting people who were downloading and uploading songs--a little like a physical swap meet provides the facilities for people exchanging illegal material, the judge said. By contrast, Grokster and Streamcast distributed software to people and had no control over what their users did afterwards, Wilson said.


When users search for and initiate transfers of files using the Grokster client, they do so without any information being transmitted to or through any computers owned or controlled by Grokster," Wilson wrote. "Neither Grokster nor StreamCast provides the site and facilities" for direct infringement. "If either defendant closed their doors and deactivated all computers within their control, users of their products could continue sharing files with little or no interruption."


It didn't matter that the companies were aware generally of copyright infringement happening using their software, Wilson added--they would have to know of specific instances of infringement and be able to do something about it, to be liable for those users' actions.


That stands in stark contrast to an earlier ruling against file-swapping company Aimster, in which the judge explicitly said the file-trading company did not need to know about individual acts of copyright infringement as they were happening to be held liable for the illegal activity.


Friday's decision is likely to send shock waves throughout the copyright and technology communities, which have adjusted slowly over the last year to the notion that file-trading services such as these were mostly likely illegal. Technology companies have complained that the repeated lawsuits have stifled innovation, but many also have begun to move forward in alliances with authorized music--and film-distribution services.


The case will certainly be appealed. Because different courts have come to very different conclusions about the law, the issue could go as high as the U.S. Supreme Court, a process that would likely take years.


"This is far from over," said Fred von Lohmann, an Electronic Frontier Foundation attorney who has represented Streamcast in the case. "This is not the end, but it sends a very strong message to the technology community that the court understands the risk to innovation."


In the interim, the ruling is likely to produce another round of interest in legislation affecting copyright issue on the Net--an outcome that Wilson himself foresaw.


Policy, "as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials," Wilson wrote. "Congress has the constitutional authority and the institutional ability to accommodate fully the raised permutations of competing interests that are inevitably implicated by such new technology...Additional legislative guidance may be well-counseled."


News.com's Lisa Bowman contributed to this report.

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Sharing music on a one to one basis has never been illegal.


Essentially what you have is many people sharing music on a one to one basis on a much larger scale.


It was not until the technology became available to share music on such a global scale that people in the RIAA began to be afraid of what they saw as percieved loss of funding.


Truth be told, music sales have been going down due to increased prices and decreased quality.



In the above article the judge ruled that sharing music is simiilar to VCR's and other recording media.



So Sorianofan have you never used a VCR? If so then you are also guilty of 'stealing'



As they say...let those without sin be the first to cast the stone.

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I think the recording industry needs to stop whining and start making their product more attractive if they want to really improve sales revenue. Right now downloading a movie from the internet is easy and I do not see the cinematographic industry coming after everybody who does it... Why? because their sales have not declined... Why it has not declined? Because the product they offer is superior. Because it is better to have the actual DVD with the extras and cool stuff that they now come with, instead of downloading a poor quality movie of the internet. That is the difference and this is what the recording industry needs to look at before jumping on their guns and accusing all their possible consumers of "thiefs".

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I knew people in high school (and people now in collgege) who stopped paying to see movies becuase they could now get them for free. I know people who download albums worth of mp3s and turn it into a cd and listen to it in the car instead of buying it.


That's immoral and that is stealing. Say what you will, but if attaining a copy of any media deturs you from buying that media, you are stealing.


I have sat down and thought morally about the issue, and there are some "loop holes."


1. You buy the product anyway

2. You would never buy the product unless you downloaded it

3. You like the product, but not enough to actually pay for it


These are pretty broad loopholes. However, the majority of "sharing" replaces four mediums: the cinema, dvd/vcr, cd, and radio. Buy downloading these things for free, you are literally stealing from the movie makers, music companies, and the radio broadcasters (ironically, these guys are all part of the same massive conglomerates anyhow.) When you use files to literally replace an once desired medium, its stealing thus immoral.


Now the very few above who actually just get a burned cd because a friend of theirs want them to have it and they would of never bought it, need a good sampling before they buy it, or like the product, but would of truly never bought it are not stealing, because in reality they would of never decreased the media providers business, thus taking their fair share of profits.

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apparently, I'm all about the posting 3 times in a row.


I agree with Das and lcyberlina...the quality of music has gone down, and prices have gone up. OF COURSE SALES ARE GOING TO DROP! The music today is sh*t. Country (IMO) has gotten worse. Pop music today is not what it used to be (Beatles > Britney Spears). Bands like Metallica put out worse and worse cds each time. And rap....it's funny, because on rap cds they talk about stealin, pimpin, gangbangin, etc.....but then complain when people "steal" their cds.

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So, let me get this straight. It's alright to hear a song on the radio, and then go buy the cd, but it's not alright to download a song by someone you wont hear on the radio (say, Cast Iron Filter, Widespread Panic, Ben Harper, etc.), and then go by the cd.


So, what I must do, is go to cdnow.com, amazon.com, etc. and listen to 15 second snippets, and decide if I am going to spend 11.99-15.99 on a CD that I may or may not like?


Beautiful. You call it stealing. I call it smart.

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1 song is an entity unto itself. CD's don't get copywritten, individual songs do.

the vast majority of individual songs are not available for sale. record companies are wary of selling individual songs because they can't pawn off an entire album in the process.


the poster above admits to "sampling" music. i think it's pretty difficult to argue that one song is NOT a "sample" of the product that is actually sold in stores.


obviously, downloading songs is still illegal.

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So my friend likes James Taylor. I dont really know who he is, but he plays Carolina On My Mind, and of course I know it. So I download the song, listen to it. Listen to someone else's cd, and then a buy it.


How does James Taylor or the company lose out on my buying it?


Or Widespread Panic? My friend LOVES Widespread, but I dont really know their music, although I've heard about it. So, my friend downloads some Panic, and then sends them to me. I go ahead and buy a cd. I download a few more songs, and then download a live double album by Widespread Panic. Tell me, how does WSP or the company lose out?


Or what if I like Jerry Reed's song "Amos Moses", but I dont really like any of his other stuff, because his voice gets annoying? I make a mix cd, and throw in Amos Moses on there. Should I suffer through buying a whole cd of Jerry Reed, when in fact, I just want to listen to Amos Moses? The song is like 25 or 30 years old, and chances are, I'll hear it on the radio once in a blue moon. Oh, but I could buy that song on Napster or something! Bullsh*t. I have to buy music if I cant listen to it on the radio every 10 minutes? That's crap.

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and it's a beautiful thing when you can make mix cds. Many people don't like to listen to a cd of all the same person/group.

That's like I said about the icrecream parlor. You take a bunch of free icecream from everywhere and end up with an equivalent of a whole product. Would you do that to an innocent ice cream store guy? Why would you do that to a music company.


Music got worse? Then don't listen to it? Don't like the price? Don't buy it. When you take something from someone, no matter how little, and they DON'T GIVE YOU PERMISSION its stealing, that's rather simple.

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and it's a beautiful thing when you can make mix cds. Many people don't like to listen to a cd of all the same person/group.

That's like I said about the icrecream parlor. You take a bunch of free icecream from everywhere and end up with an equivalent of a whole product. Would you do that to an innocent ice cream store guy? Why would you do that to a music company.


Music got worse? Then don't listen to it? Don't like the price? Don't buy it. When you take something from someone, no matter how little, and they DON'T GIVE YOU PERMISSION its stealing, that's rather simple. no, i'd say taking different songs and making mix cds is more analogous (sp?) to one of 2 things...


1)taking a sample from 50 different ice cream parlors and making a cone-full.




2)buying a bunch of cone-fulls of ice cream (buying cds) and taking a spoonful from each cone (downloading songs that you already have) and making a mixed ice cream cone.


As gay as that analogy is, it's true. At least for me, and the friends that download music.

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I wasn't coveting my neighbor's wife, I just coveted 50 different wifes in a very small way, and so its not a sin, right...

You cannot justify stealing, I reiterate:


Music got worse? Then don't listen to it? Don't like the price? Don't buy it. When you take something from someone, no matter how little, and they DON'T GIVE YOU PERMISSION its stealing, that's rather simple.


Its not even like your icecream analogy. Its like breaking into 50 people's houses and stealing only one spoonful of sugar. You are still stealing.

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sampling is different than stealing. The goal of musicians and the music industry is to sell albums. Well, if I sample the music, and like it, I'll buy the cd.


Downloading music is nothing like cheating on my wife.


As for not listening to music...my options are: dont listen to music, or listen to crappy music? No. There is still good music, but the quality of music has gone down, and the prices have gone up. Therefore, more sampling is required, so I wont get ripped off.

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once again, your analogies are ludicrous, and don't even warrant a response!


SAMPLING DOES NOT EQUAL STEALING. Going to a store, walking out with a cd that isn't payed for is stealing. Downloading music, listening to the music, judging if it is good, then buying the cd, or not listening to the music, is not stealing. It's about as much like stealing as taking a sample of ice cream at your little parlor and seeing if I like it.


If I dont want the whole cd, and only want one song, then there should be no problem downloading the music. It's not like I can go out and by "Amos Moses" by Jerry Reed at the store. I would have to buy the cd that that song is on. He isn't losing any money. In fact, the only money he would be losing is if he ripped me off, and I bought the cd for one song, and just skipped the other 10 or so songs.

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