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File-sharing software firm loses US case

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Another file-sharing software maker has been found guilty of causing copyright infringement. A US judge has said the Morpheus software produced by StreamCast breaks the law.

The ruling is another victory for the entertainment industry, which has had a string of recent victories and concessions. Just weeks ago Kazaa settled with the music industry for $100m.

MetaMachine was ordered to pay $30m to settle a copyright suit earlier this month over its eDonkey and Overnet file sharing software. Napster shut down and only the brand survived, now fronting an authorised download site and Grokster has been shut down by courts.

In 2003 Judge Stephen Wilson ruled that StreamCast could not be held responsible for the actions of its software's users, a decision that was backed by the appeals courts. Last year, though, the Supreme Court in the US ruled that file sharing software companies were liable for the software's use because they encouraged or induced users to commit copyright theft.

The Supreme Court then sent the case back to Delaware and to Wilson, who has delivered his revised judgment.

"In the record before the court, evidence of StreamCast's unlawful intent is overwhelming," he wrote this time around in his judgment. Granting a motion for summary judgment against StreamCast, he said there was evidence of "massive infringement" on the StreamCast network.

The suit had begun in 2001 when a coalition of film studios, music publishers and record labels sued StreamCast as part of the MGM v Grokster case, in which many other companies were named. After the Supreme Court ruling, which covered all the named companies, StreamCast was the only company to continue to fight its case. An appeal against the ruling is still possible.

RIAA chairman Mitch Bainwol said in a statement: "This court has spoken clearly, powerfully and persuasively to the principle that businesses based on theft will be held accountable."

Copyright © 2006, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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