Federal court revisits music-swap case

LOS ANGELES -- In a landmark case over online piracy, a federal appeals court yesterday considered whether Napster-like Internet services can be shut down if their users swap unauthorized copies of movies and music.

Lawyers for the entertainment industry squared off against attorneys for file-sharing services Grokster and Morpheus before a three-judge panel of the US 9th Circuit Court of Appeals in Pasadena to revisit a key ruling by a lower court. That decision by a federal judge in Los Angeles rejected a bid by film studios and record labels to shut down Grokster and Morpheus, saying the file-sharing services enjoyed the same legal protection as the makers of videocassette and DVD recorders.

That ruling in turn relied on a 1984 US Supreme Court decision that held that Sony Corp. was not liable for copyright infringement by selling VCRs that allowed users to tape TV shows -- a legal finding that became known as the "Betamax Doctrine."

"While the odds are against them, [music and movie makers] have a lot to gain. If they could get a win, it would be a huge win," said Evan Cox, an intellectual property attorney in the San Francisco office of Covington and Burling.

Music companies claim song swapping has caused lower sales of CDs because customers copy their free digital music files onto blank CDs, which violates US copyright law.