Pasadena, CA (August 24, 2004)–The U.S. Court of Appeals for the 9th Circuit has upheld an April 2003 decision that file-swapping networks operated by Morpheus and Grokster should not be held liable for the illegal actions of their users. The decision is a major setback for the entertainment industry, represented by the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA).
Judge Sidney Thomas of the three-judge panel wrote, “History has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine, or an MP3 player. Thus, it is prudent for courts to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.”
Referring to the Sony Betamax case, Judge Thomas continued, “We live in a quicksilver technological environment,” and it is not for the courts to attempt to “fix the flow of internet innovation.” The plaintiffs must instead look for redress from Congress, wrote Judge Thomas, noting that, in the landmark 1984 decision, the Supreme Court “spoke quite clearly about the role of Congress in applying copyright law to new technologies.”
Sen. Orrin Hatch (R-Utah) and Sen. Patrick Leahy (D-Vermont) introduced the Inducing Infringement of Copyrights Act two months ago. Last month, the Senate Judiciary Committee heard testimony on the bill (SB2560), which would hold technology companies liable if their products induce or encourage copyright infringement by users.
Judge Thomas also cautioned against any attempts by copyright owners to revisit current law. “Doubtless, taking that step would satisfy the Copyright Owners’ immediate economic aims. However, it would also alter general copyright law in profound ways with unknown ultimate consequences outside the present context.”
The RIAA and MPAA are said to be reviewing their options.