High Court Says File-Sharing Companies May be Sued

The Supreme Court says Internet file-sharing services will be held liable if their customers illegally share files such as digital music and movies.
The decision sends the case back to the lower court, which had ruled in favor of file-sharing services Grokster and StreamCast Networks on the grounds that the companies couldn’t be sued, the Associated Press reports.
In a unanimous decision, the court rejected arguments that the lawsuits will have a chilling effect on new digital music listening technologies, such as the iPod.
TV broadcasters consider the ruling a victory, arguing that the majority of digital peer-to-peer file-sharing on computer networks infringes on the copyrights of the originator of the content.
“Today’s court decision in the Grokster case underscores a principle Public Knowledge has long promoted – punish infringers, not technology,” said Gigi B. Sohn, president of Public Knowledge, in a statement.
“The court has sent the case back to the trial court so that the trial process can determine whether the defendant companies intentionally encouraged infringement. What this means is, to the extent that providers of P2P technology do not intentionally encourage infringement, they are exempt from secondary liability under our copyright law.”
She said the court also acknowledged that there are lawful uses for peer-to-peer technology including distribution of electronic files by universities, government agencies, corporations and libraries.