COPYCENSE

Noting that settlement talks with the Recording Industry Association of America and other entertainment firms had broken down, the company that owns the Morpheus online file-swapping software said late last week that it would fight copyright infringement allegations in court.

StreamCast Networks, the Australian company that owns Morpheus, had been trying to settle litigation with the music industry after the U.S. Supreme Court held nearly one year ago that StreamCast and other file sharing firms could be held liable for copyright infringement.

In reversing a federal appeals court in California, the Supreme Court’s ruling in Metro-Goldwyn-Mayer Studios Inc., et al. v. Grokster, Ltd., et al., determined that the Court of Appeals for the Ninth Circuit mistakenly concluded that Internet-based file sharing services like Grokster and StreamCast’s Morpheus should be immunized from copyright liability for acts of copyright infringement that others commit on their networks. “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties,” wrote Justice David Souter.

The judgment in the MGM case called for the Ninth Circuit to reconsider its decision in light of the Supreme Court’s ruling. Copyright lawyer William Patry opined in his blog after the decision was released that the Court “punted” and effectively decided the case on issues not at issue. The original case and controversy dates back to 2003.

StreamCast has decided to fight this case at the same time it has launched a lawsuit against Skype, the distributor of popular free Internet telephony software. StreamCast alleges in this lawsuit that it owns the underlying technology Skype uses in its business.

StreamCast has chosen to litigate its case against Skype under the Racketeer Influenced and Corrupt Organizations Act (RICO), a United States federal law which provides for extended penalties for criminal acts performed as part of an ongoing criminal organization

Jim Welte. StreamCast To Fight Music Biz. MP3.com. April 7, 2006.

See also:

Alex Veiga. Copyright Talks Break Down. San Jose Mercury News. April 9, 2006.

Candace Lombardi. StreamCast Names Skype, Kazaa In Lawsuit. News.com. March 27, 2006.

CopyCense. Grokster Reflection. June 30, 2005.

CopyCense. Supreme Court Rules Against Grokster. June 28, 2005.

CopyCense™: K. Matthew Dames on the law, business, and technology of digital content. A business venture of Seso Digital LLC.