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US court demands stronger copyright filters for Morpheus

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A permanent injunction has been imposed on the distributor of the Morpheus file-sharing software. A US court ruled yesterday that StreamCast Inc. must use "the most effective means available to reduce the infringing capabilities of the system."

The ruling comes less than a week after Google announced the launch of its own filter to block copyright-infringing material from its YouTube video-sharing site. Yesterday's 83-page judgment could prove influential in Viacom's $1bn lawsuit against Google, which accuses YouTube and its parent company of inducing infringement by users.

StreamCast Networks Inc. and peer-to-peer (P2P) rival Grokster Ltd. were first sued by MGM Studios and others in a California district court in 2001. Their software allowed millions of users to share music, software and movies over the internet. In a landmark ruling in 2005, the US Supreme Court concluded that StreamCast and Grokster induced copyright infringement and could be held liable for infringement committed by the users of their software. The case was sent back to the district court to consider MGM's motion for summary judgment.

StreamCast is the only defendant remaining in the case. Yesterday, US District Judge Stephen V Wilson rejected MGM's request for a permanent injunction that would ban the distribution of the Morpheus software; but he agreed to impose one that could have the same effect.

The court has previously ruled that StreamCast distributed Morpheus "with the intent to induce copyright infringement." Its business targeted "a known community of infringers – former Napster users," noted Judge Wilson, and its business model "depended on massive infringing use".

In November 2006, StreamCast implemented what it called "a robust filtering mechanism" to block copyrighted works that are not authorised for free downloading. It populated its list of works with the names of artists from the website of music industry body the RIAA.

'Hopelessly ineffective' filter

The nature of the Morpheus system is such that only new users and those who choose to upgrade their software are subjected to the copyright filters. (It is a de-centralised P2P system, unlike Napster, so users do not conduct searches via the Morpheus website.) In December 2006, StreamCast began sending messages to users of legacy versions of Morpheus. These messages "strongly recommended" that they upgrade. But in December 2006 and January 2007 only about one-third of the downloading was from software that used the filter.

MGM and the other plaintiffs described StreamCast's system as a "homemade filter" that is "hopelessly ineffective." They submitted evidence that popular audio and video files were still easy to download. An expert for the plaintiffs told the court that StreamCast filters only by artist, not by title name; it does not filter common misspellings or variations; and its movie filters do not capture TV shows or certain file types. He also claimed it was technologically outdated because it does not incorporate digital fingerprinting.

MGM said StreamCast should make an effort to encourage legacy users to upgrade. "StreamCast should insert aggressive 'pop-ups' that would make it difficult (or at least very annoying) for users to continue with the unfiltered versions of the Morpheus software," said the plaintiffs, according to the judgment.

The plaintiffs also argued that infringements resulting from StreamCast's inducement would cause irreparable harm. "StreamCast has and will continue to induce far more infringement than it could ever possibly redress with damages," they said. The court agreed. Judge Wilson added, "it is highly likely that the award of statutory damages that ultimately befalls StreamCast in this case will be enormous … and would far outstrip the amount of revenue the company has garnered in recent years."

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