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The Supremes prep for P2P battle royal

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The US Supreme Court is ready to put P2P networks, technology firms and your rights to share culture to the test.

The high court today revealed that it will review a lower court ruling, which cleared P2P firms Grokster and StreamCast of being held liable for the actions of their users. The earlier lower court decision, which placed blame for copyright violations on end users and not the P2P companies, was a serious blow to the major record labels and movie studios. The media conglomerates have now gotten their way and put the P2P firms before the Supreme Court.

The stakes, however, in this matter will likely be even higher than whether a couple of P2P firms are found to directly aid copyright infringement. The court will put the 20-year-old Sony-Betamax decision under the microscope. This decision made it possible for companies to distribute devices such as the VCR that let consumers make copies of copyrighted material. The basis for the decision is that the products can be shown to have legal, legitimate uses that are substantial enough for the products to be made available even if they can sometimes be used for illegal activity. In addition, the company supplying the device cannot be held liable for what a user may do with the product.

Northern California's 9th Circuit pointed to the Sony-Betamax decision in the Grokster/StreamCast case, saying P2P technology appears to have many non-infringing uses. In addition, the court warned that legislators should not step in and crush a new technology just because it at first seems disruptive to a market. The movie studios, for example, tried to block the VCR, only to later benefit from a huge rental market.

Technology company advocates are fighting to protect both the Sony-Betamax decision and P2P technology. They fear that invention around devices such as MP3 players, copying systems and even broader forms of computing products could be stifled by strict laws governing whether or not a given technology could contribute to copyright infringement.

“While we are disappointed that the Court has taken the case, we believe strongly that at the end of the day, the 1984 Sony Betamax doctrine, which has done so much to promote technological innovation to improve the lives of consumers, will be reaffirmed," said Public Knowledge, a public interest group. "The big content companies are trying to accomplish in this case what they have failed to do in the 20 years since Betamax, and what they have failed this year to accomplish in Congress – to put restrictions on new technologies that suit their purposes not the needs of consumers."

“The evidence that file-sharing has significantly hurt the large content companies is very thin. But the trade-off of giving content companies more control over the development of technologies and of overturning Betamax, would be very significant and very harmful to consumers and to our economy."

The pigopolists, more interested in preserving their monopoly on content than innovation, see things in a different light.

"There are seminal issues before the court - the future of the creative industries and legitimate Internet commerce," Mitch Bainwol, chief executive officer of the Recording Industry Association of America, said in a statement. "These are questions not about a particular technology, but the abuse of that technology by practitioners of a parasitical business model."

Two courts have already sided with Grokster and StreamCast over the media powerhouses, and the Supreme Court may well do the same. This would be a big win for the technology companies which have much larger franchises to protect than the media giants. In the end, however, a victory for the P2P firms will likely mean even more lawsuits against consumers. The RIAA and MPAA have taken to suing their customers because they can't get at the P2P choke points.

The case is expected to be heard early next year with a ruling arriving by July. ®

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