P2P case on heels of Kazaa verdict

By Carmen Russell The China Post

On Friday, the Taiwan District Court is expected to rule on a copyright infringement case against the nation’s largest peer-to-peer (P2P) file swapping firm Kuro. The verdict will be coming only four days after Kazaa lost a similar case in Australia where the country’s highest court found the file-swapping software responsible for the copyrighted content its members illegally downloaded.

“The respondents authorized users to infringe the applicant’s copyright in their sound recordings,” Australia Federal Court Judge Murray Wilcox said in his ruling Monday. The music industry has estimated that as many as 100 million people have used Kazaa to download 3 billion music files for free each month. The results of the case, however, were not a total win for Sony BMG, EMI, Warner and the other plaintiffs in the music industry that filed the suit in 2002. Rather than order Sharman Networks, Kazaa’s distributor, to cease and desist, Wilcox simply required the company to modify its software so that it would not continue to “encourage” illegal sharing. Still, the verdict has given hope to the International Federation of the Phonographic Industry (IFPI) and the other plaintiffs in the Taiwan case which filed their lawsuit two years ago. Following announcement of the Australia court verdict, IFPI’s secretary general in Taiwan Robin Lee has said “I am eagerly looking forward to Friday’s judgment.” The IFPI, along with other members of the record industry, initially accused Kuro in August, 2003, of violating copyright law by encouraging its members to trade in copyrighted content music. They formally filed a lawsuit in December of the same year. Kuro is the largest file-swapping Internet software in Taiwan with more than 500,000 members online. Lee notes that “by charging each user NT$99 per month, the company is making NT$600 million per year” off content it doesn’t own. Meanwhile, Lee notes, the recording industry is losing sales. “Last year the Taiwan recording industry had a volume of 4.4 billion,” Lee explained. “In the first half of this year, sales saw a decline of 30 percent compared to the same period last year.” While another landmark case against file-sharing companies such as Grokster and Morpheus before the U.S. Supreme Court in June also resulted in a victory for the recording industry, Taiwan’s judicial record has been more spotty. In the same month, the Shilin District Court found Expeer, another Taiwan-based file-sharing service provider, not guilty of copyright infringement. Lee expressed a feeling that it set a dangerous precedent for Taiwan. “”P2P firms in the U.S., Australia and Japan have all lost their cases,” Lee said. “I hope that the justice system won’t let Taiwan become a haven for Internet piracy.” David Yang, a spokesperson for Fashionnow Co., Ltd, which distributes Kuro, however, is unfazed by either the industry’s accusation or the potential outcome of the court case. “There have been many lawsuits recently with different results,” he said. “We think the situation will remain the same no matter what happens Friday. If we lose the case, it doesn’t mean our members will go back to the old ways and buy CDs. Lawsuits are not the key to solving the problem.” Rather, Yang says, the industry must come to terns with the new environment. “We are facing a new age,” he responded to the industry. “You must change the way you make your money and find cooperation between Kuro’s members and the artists. There must be new rules which allow digital music to run its course.”