Friday, August 20, 2004 - Green Light for Grokster - Green Light for Grokster "In a powerful setback to the entertainment industry's efforts to fight illicit online trading of movies and music, a federal appeals court affirmed a lower-court ruling allowing creators of Internet file-sharing software to stay in operation, despite piracy by users of their programs.
The ruling yesterday by three judges for the Ninth Circuit Court of Appeals in San Francisco will almost certainly intensify efforts by movie studios, music companies and songwriters -- the plaintiffs in the case -- to curb online piracy through other means.
Those efforts are expected to include lobbying for legislation designed to crack down on makers of file-sharing programs and lawsuits against individuals who share pirated files over the Internet. Music companies have already been filing such lawsuits for about a year, though the Hollywood studios have not yet followed suit.
The entertainment companies involved in the case said they were also considering whether to appeal the ruling to the U.S. Supreme Court. The recording industry largely blames rampant online file sharing of music that began in 1999 for a multiyear decline in global music sales, and Hollywood movie studios have been bracing for the impact of such activity in their own business. Motion Picture Association of America Chairman Jack Valenti stressed that "copyright theft is still illegal" and the decision "should not be viewed as a green light" for companies or consumers to ignore the rights of copyright holders."

This is happy news for Microsoft and other vendors that have invested mega$ in digital rights management. I presume the co-founders of Skype, who also created Kazaa, can now get out of what Fortune called "catch us if you can" mode.

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