A US court has ruled that peer-to-peer software makers are not liable for copyright infringement resulting from the actions of their users.
A three-judge appeal panel unanimously backed a lower court ruling that Grokster, Streamcast Networks and Musiccity.Com are not responsible for users who illegally copy or share content such as music and movies over their services.
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The technology at issue is not simply a tool engineered to get around previous rulings against the Napster file-sharing service, they said. "The technology has numerous other uses, significantly reducing the distribution costs of public domain and permissively shared art and speech, as well as reducing the centralised control of that distribution."
The ruling is a further setback for the film and music associations, which were appealing against an April 2003 ruling.
The Motion Picture Association of America and Recording Industry Association of America said that they are reviewing the next legal steps to take, and are widely expected to continue the appeal.
Groups supporting the peer-to-peer networks welcomed the decision.
"This is a victory for innovators of all stripes," said EFF senior intellectual property attorney Fred von Lohmann. "The court's ruling makes it clear that innovators need not beg permission from record labels and Hollywood before they deploy exciting new technologies."
In its first incarnation, Napster allowed data to flow through servers that it operated, and in 2001 courts ruled that practice did directly infringe on the rights of copyright holders. However, the technology has since evolved, and companies such as Grokster and Streamcast use networks the judges recognised as "truly decentralised". As a result, peer to peer companies would have no direct knowledge of individual file transfers, making them unable to directly stop the transfer of content, legal or otherwise, the court said.
Laura Rohde writes for IDG News Service