TELECOM Digest OnLine - Sorted: US Congress Told to Wait on File Sharing Action

US Congress Told to Wait on File Sharing Action

Reuters News Wire (reuters@telecom-digest.org)
Wed, 28 Sep 2005 22:07:05 -0500

Congress should probably wait and see how lower courts apply a recent
landmark Supreme Court ruling on file-sharing networks before trying
to legislate on the subject, the U.S. official in charge of copyrights
said on Wednesday.

The Supreme Court's decision in June that anyone who distributes a
device used to infringe copyright is liable for the resulting acts of
infringement by others may well have resolved questions about
boundary-setting in file-sharing networks for now, said Marybeth
Peters, the U.S. Register of Copyrights.

But the Supreme Court also sent the case back to a lower court for
further action on whether the file-sharing networks encouraged its
users into infringing action.

"It may be that legislation should be enacted, but my own preference
would be to see how the courts deal with this at this time," Peters
told the Senate Judiciary Committee.

The ruling to date has caused a ripple effect among file-sharing
services. Several have curtailed operations or sought to align
themselves with legitimate business partners.

The president of the developer of the popular file-sharing site
eDonkey testified on Wednesday that he expected all existing open
peer-to-peer companies in the United States to cease operating in
coming months due to the legal uncertainty surrounding their
operations.

He warned there was a danger of driving all peer-to-peer networks
offshore, but said his company would comply with a cease-and-desist
letter it had received from the trade group Recording Industry
Association of America.

"The direction we're headed in is compliance rather than litigation,"
Sam Yagan, president of MetaMachine Inc., developer and distributor of
eDonkey.

"Because we cannot afford to fight a lawsuit, even one we think we
would win, we have instead prepared to convert eDonkey's user base to
an online content retailer operating in a 'closed' P2P (peer-to-peer)
environment," he said in testimony.

He told reporters after the hearing he had been talking with Ali
Aydar, the chief operating officer of SNOCAP Inc., a company formed by
Napster founder Shawn Fanning to enable authorized digital
distribution of content through peer-to-peer service.

Copyright 2005 Reuters Limited.

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