Hollywood wins as Grokster agrees to end P2P service

Hollywood wins as Grokster agrees to end P2P service: "Hollywood wins as Grokster agrees to end P2P service

By Brooks Boliek
WASHINGTON -- Hollywood and Grokster ended their legal war Monday as the recording and movie industries and the P2P service agreed to settle a lawsuit that went all the way to the U.S. Supreme Court.

According to a settlement agreement, lead plaintiff Grokster will shut down its infringing service.

While lawsuits against other P2P services like Kazaa continue, the injunction against the lead party is a significant move.

'This settlement brings to a close an incredibly important chapter in the history of digital music,' said RIAA chairman Mitch Bainwol. 'This is a chapter that ends on a high note for the recording industry, the tech community and music fans and consumers everywhere. At the end of the day, this is about our ability to invest in new music. An online marketplace populated by legitimate services allows us to do just that.'

The settlement includes a permanent injunction prohibiting infringement, directly or indirectly, of any of the plaintiffs' copyrighted works. This includes the immediate cessation of the distribution of the Grokster client application, and the cessation of operation of the Grokster system and software, according to a music industry release.

After the settlement was announced, the grokster.com Web site carried a warning that the Supreme Court 'unanimously confirmed that using this service to trade copyrighted material is illegal.' The site includes links to respectcopyrights.com and musicunited.org, entertainment-industry supported Web sites that support intellectual property rights.

The case put an indelible stamp on the rules that control the distribution of copyrighted works on the Internet. It was the biggest copyright case decided by the court since its 1984 decision that Sony Corp. could not be sued if consumers used VCRs to make illegal copies of movies.

Writing for the court, Justice David H. Souter said lower courts could find the file-sharing services responsible by examining factors such as how companies marketed the product or whether they took easily available steps to reduce infringing uses.

He dismissed Grokster's argument that legal uses of the service were important enough to override copyright concerns since very few people use the services for benign uses.

'While there is doubtless some demand for free Shakespeare, the evidence shows that substantive volume is a function of free access to copyrighted work,' he wrote. 'Users seeking Top 40 songs, for example, or the latest release by Modest Mouse, are certain to be far more numerous than those seeking a free Decameron, and Grokster and StreamCast translated that demand into dollars.'

According to copyright industry claims as much as 90% of songs and movies copied on the file-sharing networks are downloaded illegally.

The Supreme Court's ruling sent the case back to the district court for trial, but apparently Grokster didn't have the stomach for the fight as Monday's action ends the case."