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US court demands stronger copyright filters for Morpheus

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StreamCast argued that file-sharing has not harmed music sales. Judge Wilson said that was irrelevant. "It would also make no difference if StreamCast's inducement was demonstrated to increase Plaintiffs' sales," he wrote, pointing out that as copyright owners, "Plaintiffs have the exclusive right to decide when and how their material should be reproduced and/or distributed, regardless of whether their decisions make good business sense."

He also noted that "Morpheus users have the continued ability to pillage a tremendous quantity of Plaintiffs' intellectual property, and to spread this capacity elsewhere with additional file sharing."

"The only realistic method for remedying such future harm resulting from StreamCast's inducement is by way of a permanent injunction," he wrote.

However, Judge Wilson said that MGM's proposed injunction went too far, describing its language as "unacceptable." It asked that StreamCast be permanently banned from "directly or indirectly enabling, facilitating, permitting, assisting, soliciting, encouraging, authorizing, inducing or knowingly materially contributing to" another's infringement through Morpheus.

He pointed out that StreamCast had been found liable for "inducing" infringement, not for "contributory infringement" – so the reference to "knowingly materially contributing to" was inappropriate. He also took issue with the words "enabling" and "permitting".

He concluded that "inducement is the only form of liability that is relevant to the permanent injunction."

StreamCast argued that a 1984 Supreme Court ruling on Sony's Betamax video recorder protects it. In that case, Sony was accused of infringing copyrights. But Sony won because the machine had significant non-infringing uses. Judge Wilson said that case "provides no immunity where a staple's distribution is sufficiently connected to the promotion/encouragement of infringement."

"There is a distinction between forbidding distribution of a technology capable of substantial noninfringing uses and simply requiring sufficient efforts to minimize the prospective infringement that would otherwise be induced through the staple's distribution," he wrote. "StreamCast would still be allowed to distribute Morpheus so long as it undertook sufficient measures to mitigate end-user capacity for infringement."

Referring to the Napster litigation, Judge Wilson said, "products capable of substantial noninfringing use can be filtered if the failure to do so would constitute either continued contributory infringement … or vicarious infringement. It would therefore be anomalous if such filtering were always unavailable where a defendant has only been held liable for inducement."

'The bell cannot be unrung'

The court also had concerns about the continuing harm, pointing out that distribution after the encouragement of infringement ends, can by itself constitute inducement. "StreamCast has etched its niche in the market for infringement," he wrote.

He added: "neither the simple passage of time nor the entry of judgment in this case can remedy StreamCast's past promotion as the 'next Napster.' The fact that a permanent injunction is imposed also does not leave Morpheus magically reborn as a product safe for unfiltered distribution under [the Sony case]."

"The bell cannot be unrung," he wrote. "Accordingly, Morpheus's connection to the past promotion of infringement means that StreamCast's continued distribution of Morpheus alone constitutes inducement."

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