P2P file-sharing services are legal, says US appeals court

Wired story:

Peer-to-peer file-sharing services Morpheus and Grokster are legal, a federal appeals court ruled Thursday.

The decision is a blow for record labels and movie studios which sued the peer-to-peer operators claiming that the services should be held liable for the copyright infringement of their users.

The Recording Industry Association of America and the Motion Picture Association of America have long argued that rampant trading of copyright songs and movies on these file-swapping networks has crippled their businesses.

The decision upholds an April 2003 U.S. District Court decision that these services should not be held liable for the illegal behavior of their users. The studios and labels appealed the decision and the appeals court heard oral arguments on the case in February.

The district court correctly applied the law, wrote Judge Sidney Thomas, a member of the three-judge panel for the 9th U.S. Circuit Court of Appeals.

“History has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine, or an MP3 player,” Thomas wrote. “Thus, it is prudent for courts to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.”