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IP: KaZaA BV lawyers explain why file sharing is not theft
From: Dave Farber <dave () farber net>
Date: Thu, 09 May 2002 04:50:48 -0400
------ Forwarded Message From: Nathan Cochrane <ncochrane () theage fairfax com au> Organization: The Age newspaper Reply-To: ncochrane () theage fairfax com au Date: Thu, 09 May 2002 15:30:11 +1000 To: Dave Farber <dave () farber net> Subject: KaZaA BV lawyers explain why file sharing is not theft Hi Dave Phillips Fox acts for KaZaA. Below, one of the lawyers, Mimi Curran, explains why the firm won in the Dutch case around contributory copyright infringement and the legal future of P2P in the face of changing US legislation and interpretation. Favourite quote: "Although there is much talk of convergence, the reality is that computers have the edge on traditional media in attracting users and that the traditional media companies are struggling to find their way with the new technology available." --- File sharing software scores its first victory in the courts Although the American courts sounded a death knell for Napster last year, other peer to peer file sharing software systems continue to operate on the Internet. Various law suits both in the US and Europe have been commenced against a number of these operators and now a Dutch company, Kazaa BV, has been successful in the Dutch appellate courts in relation to a claim brought against it by Burma/Stemra (the Dutch equivalent of AMCOS). The technology What is peer to peer file transfer? It is software that when downloaded onto someone's computer, enables that person to access another person's hard drive and to find and copy certain files that the software is designed to recognise. In effect, it allows a direct link between two computers and can be an effective way of transferring data. The Napster case The Napster web site made available the software necessary for the peer to peer file transfer to work. People used it primarily for copying MP3 music files so bypassing the need to actually purchase recorded music from record stores. The Napster site did not maintain a central database of musical tracks - users did not have to access the site again once they had obtained the software. Napster was not itself copying the music that users accessed from each other. It did however provide a database of what was available from other users of the site, making it easier for users to find out whom to go to for certain pieces of music. It was this database that caused the American courts to find against Napster, not the technology itself. The compilation of the database gave Napster actual knowledge of the copyright infringement that was occurring with the various uses of the software. Under Australian law, Napster, by its conduct, was authorising infringing acts. Alternative sources of peer to peer file transfer software Although the American decision spelt the end of Napster as a free service (it has recently relaunched as fee paying service but take up has not been great), a number of other operators (Kazaa, Morpheus, Grokster and Gnutella) have stepped in to fill the gap. These services have avoided the mistake made by Napster and do not provide any central database. All they do supply is the software. The Dutch decision The Dutch court ruled that file-trading developers were not liable for the copyright infringement that occurs by people using the Kazaa application. The decision mirrors rulings in other countries that made the sales of video recorders and MP3 players legal. Indeed it reflects the view of the judge in the Napster case that actual knowledge of infringement cannot be assumed if a technology has the possibility of being used for non-infringing purposes and as well as infringing purposes. However, despite the excitement that the decision has generated amongst technology companies, the developers still have to overcome a number of cases being brought against them in the US as well the introduction of new legislation in the US to combat the threat to traditional media from the new technologies (see below). Why the traditional medial companies are concerned Increasingly, people (particularly younger people) are switching off their televisions and turning on their computers instead to watch films and television programmes (often without the hassle of the advertising which may have paid for or contributed to the cost of making the programmes in the first place), listen to music (free of course), play games, have access to news sources from around the world, talk to online friends and order pizza, all without having to leave the comfort of their bedrooms! The Record Industry Association of America (the RIAA), in its case against Napster, produced persuasive statistics to show that college students were buying fewer CDs because of the availability of software products like Napster. An alternative view is that the music industry has done little to help itself by charging high prices for its products and entering into extremely expensive recording deals with artists (and having to pay to get out of them again), so it is not surprising that hard up students will try to find a cheaper way to access entertainment. The real problem facing the traditional media is how to harness the technology and make it pay (and consumers pay for it!). Digital television companies in the US and the UK have had to file for bankruptcy. This is mostly due to them trying to attract audiences on the basis of supplying expensive content (sport and films) which the limited market cannot sustain or not being sufficiently distinguishable from other free to air or pay services available to consumers. Although there is much talk of convergence, the reality is that computers have the edge on traditional media in attracting users and that the traditional media companies are struggling to find their way with the new technology available. What steps (apart from litigation) are record companies taking to stop the use of file trading technology to copy music files? In addition to suing just about every peer to peer file transfer operator, the film and music industries are also backing a bill in the US Congress that, if enacted, will mark a departure from the traditional approach of controlling how people use technology to make copies of protected rights. Instead, the new bill seeks to control the technology itself. The bill requires the entertainment and technology industries to agree to a technological standard to halt the unauthorised copying of digital video and film. The standard will have to be included on all digital media devices (hardware or software) that reproduces, converts, retrieves or accesses copyrighted works in digital form. The bill is opposed by many of the large technology companies. They fear that it will stifle innovation and reduce the effectiveness of any device capable of playing entertainment content The battle is likely to be long and drawn out as there are powerful interests on both sides of the argument. If successful, it is possible that other countries will bring in similar legislation. In fact, it is arguable that given the global scope of the Internet, the entertainment industries will not benefit greatly unless similar restrictions can be introduced on a global basis. The problem remains for the entertainment industries that once a user has the software, there is no effective way to police what that user does with the software. Phillips Fox will keep you updated as the matter progresses. For further information contact: Mimi Curran, senior associate Tel +61 2 9286 8587 mimi.curran () phillipsfox com IT & eCommerce e- Bulletin May 2002 -- Nathan Cochrane Deputy IT Editor :Next: The Age and Sydney Morning Herald http://www.next.theage.com.au **************************************************************************** ***** This email and any files transmitted with it may be legally privileged and confidential. If you are not the intended recipient of this email, you must not disclose or use the information contained in it. If you have received this email in error, please notify us by return email and permanently delete the document. **************************************************************************** ***** ------ End of Forwarded Message For archives see: http://www.interesting-people.org/archives/interesting-people/
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- IP: KaZaA BV lawyers explain why file sharing is not theft Dave Farber (May 09)