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Supreme Court Rules Against P2P Companies

In a unanimous decision yesterday, the Supreme Court ruled in favor of MGM and several co-plaintiffs in their suit against peer-to-peer file sharing networks Grokster and StreamCast (the company which runs Morpheus). The peer-to-peer companies — referred to as such because users connect directly to each other and not to a central base — had argued that they merely provide a decentralized forum for users, and that they are not responsible for the copyright infringement that their users may perpetrate.

The decision for MGM was a reversal of the original federal court decision. The Ninth Circuit Court of Appeals in California had ruled in favor of Grokster and StreamCast, arguing that the software could ostensibly be used for legal purposes. The California court said that it is not the job of peer-to-peer networks to corral the illegal behavior of their customers.

According to the Supreme Court decision, written by Justice Souter, quoted an MGM survey, which stated “that nearly 90% of the files available for download…were copyrighted works.” Specifically referring to Grokster and StreamCast, Souter said, “The record is replete with evidence that from the moment Grokster and StreamCast began to distribute their free software…each took active steps to encourage infringement.” The Supreme Court’s decision could be a huge blow to the hundreds of thousands of customers currently utilizing the peer-to-peer networks.

Do you think the Supreme Court decided correctly? Are musicians’ rights being violated? Do you just want to keep downloading your Metallica in peace? Sound off here.