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Record Companies, Studios Chase Elusive Peer-to-Peer Pirates Beyond the U.S.

4 Oct, 2001 By: Hive News

With Napster de-fanged and reduced to a fledgling subscription service,record companies and Hollywood studios have filed suit against decentralizedmusic file-sharing downloaders MusicCity.com Inc., Grokster Ltd. andConsumer Empowerment, which provide software that allows users to grab files from friendly computers over the Internet with impunity.

In a suit filed Tuesday in federal court in Los Angeles, 28 music and film companies accused the three companies of copyright infringement by making it possible for users to produce and disseminate unauthorized copies ofmusic and movies.

This latest action launches the first wave of the campaign against companies operating outside U.S. borders -- Grokster is located in the West Indies, Consumer Empowerment in Amsterdam. Neither has a central directory or singledistribution point, which allows them to avoid prosecution and, forthe time being, liability for copyright infringement.

To prosecute peer-to-peer networks, the lawsuit needs to prove that these operators knew they were committing piracy or knew users were committing piracy, but first they have to be flushed out of hiding -- all of which is problematical for RIAA and MPAA investigators.

MusicCity's Morpheus service, Grokster and Consumer Empowerment's KaZaA sharea common peer-to-peer network powered by Consumer Empowerment's FastTrack software, which automatically links users to each other without central controls or management by the companies.

In May, record and movie companies sued New York-based file-sharing company Aimster.That case is still in its early stages.

Peer-to-peer operations using encryption may hurt their defense, experts say, since encryption suggests they clearly know what they're doing, have control over theirnetwork, and are attempting to hide copyrighted material -- and therefore can't plead ignorance. Moreover, consumers can't download any files unless they first download the sharing software provided by these companies.

Neil J. Rosini, an attorney in New York who specializes in copyright issues, told the Los Angeles Times that ignorance may not be a defense "when you're furnishing softwareprincipally for what is recognized to be an infringing use" -- namely, making unauthorized copies of audio-visual files.

"The knowledge requirement is a bit of a moving target, but in my view the ostrich defense has its limits," Rosini said. "Where those limits are remains to be seen."

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