Court win for music-copying software

Hollywood and the American record industry have suffered a major defeat in their campaign against the illegal sharing of music and film on the internet after a judge ruled that two companies who make the process possible are not to blame for it.

Grokster and StreamCast Networks, firms that distribute the file-sharing programs Grokster and Morpheus, are not guilty of copyright infringement just because some users swap copyrighted works using the software, Los Angeles federal judge Stephen Wilson concluded.

"It's a vindication. We are not pirates," the president of Grokster, Wayne Rosso, told reporters. "This is teaching the record companies and the movie companies a lesson... they need to rethink their business model."

Studio and record-label executives said they planned to appeal, but also argued that the verdict, published on Friday, reinforced their position that the sharing itself was illegal. If the ruling is upheld, their primary remaining route of attack would be to prosecute individual users. They blame file-sharing programs, used by 61 million people in the US alone, for a decline in worldwide CD sales.

Jack Valenti, chief executive of the Motion Picture Association of America, said file-sharing was "not sharing".

"It's stealing. And I don't believe any court, in the final end, is going to condone that. Therefore I feel quite confident in the end we will prevail, because we are right," he said.

But the software companies and their supporters argue that prosecuting the makers of file-sharing systems amounts to trying to criminalise new technology, rather than what people choose to do with it.

The music and cinema industries, they argue, are pursuing easy targets rather than addressing the fact that they have failed to adapt to the rise of the internet as a medium of distribution.

Invoking a landmark 1984 supreme court ruling that Sony could not be held responsible for illegal copying using its Betamax video recorders, Judge Wilson wrote: "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."

File-sharing permits computer users to scan parts of others' hard drives over the internet in order to locate and download the files they want.

If Grokster and StreamCast shut their doors, Judge Wilson ruled, that process would continue virtually uninterrupted. In contrast, Napster, the file-sharing service shut down by court order in 2001, hosted directories of its users' files, and was thus in a better position to know what they were exchanging.

A hearing is scheduled for today in connection with a related case involving Kazaa, a more widely used online sharing system.