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The U.S. Supreme Court will hear a landmark case on Tuesday that could have far-reaching consequences for both copyright holders and the technology industry. At issue is whether two peer-to-peer network operators, Grokster and StreamCast, are liable for the copyright infringement committed by their users.
Both file-sharing companies contend that P2P (peer-to-peer) networks can be used to share legal content and that they cannot control, and thus are not liable for, any piracy going on. Sharman Networks, owner of Kazaa, has mounted a similar defense in a case brought by the record industry in Australia.
The entertainment industry, which will be represented in court by MGM Studios, disagrees with such claims. Hollywood and the RIAA say P2P companies such as Grokster and StreamCast are no different from the old Napster, and that they have built their business by encouraging users to share illicit content.
A federal appeals court sided with the file-sharing networks last August, stating that Grokster and StreamCasts Morpheus had legitimate uses, even if the majority of users are trading illegal content. But the industry refused to give up, and the case will be decided by the nations top court.
The Supreme Court has in the past protected technologies with substantial non-infringing uses, such as the VCR and MP3 players. However, surveys show that more than 90 percent of P2P users are swapping copyrighted content. Based on these numbers, entertainment firms plan to attack the networks in court, rather than the technology itself.