Electronic Frontier Foundation Media Release

EFF Defends MusicCity Peer-to-Peer Technology

Tests Hollywood's Control of Content Delivery Technology

Embargoed for Release on: Tuesday, November 6, 2001

Washington, DC - The Electronic Frontier Foundation (EFF) announced today that it has joined MusicCity's legal defense team in a crucial case testing the limits of Hollywood's power to control new technologies.

"This case is about the freedom of technologists to innovate and the public's right to communicate," said EFF Senior Intellectual Property Attorney Fred von Lohmann, slated to announce the EFF's entry into the case at a 12:30 PM Eastern press conference at the O'Reilly Peer-to-Peer and Web Services Conference, in the Chevy Chase Room of the Westin Grand Hotel.

29 of the world's largest entertainment companies have sued MusicCity, the Nashville-based developer of the leading peer-to-peer file-sharing product Morpheus, in federal court in Los Angeles. Morpheus is a file-sharing tool that allows users to connect with each other and share information of all kinds. The entertainment companies claim that MusicCity should be held responsible for the alleged copyright infringements committed by Morpheus users.

"Just as the entertainment industry tried to ban the VCR, now it aims to outlaw the technology that is the next killer app of the Internet," said EFF Intellectual Property Attorney Robin Gross.

In the early 1980s, the motion picture industry tried to outlaw VCRs by claiming that Sony should be held liable for the infringing activities of Betamax users. The U.S. Supreme Court rejected this effort to stifle innovation, holding that so long as the technology is "capable of substantial noninfringing uses," vendors can build and sell it without fear of copyright litigation from entertainment companies. The lawsuit against MusicCity will likely be the pivotal test for the Betamax rule in the Internet context.

"The question is whether Hollywood media powerhouses will be able to use copyright as a pretext for seizing control over technology development," said Andrew Bridges, attorney with the Silicon Valley law firm of Wilson, Sonsini, Goodrich & Rosati and lead defense counsel for MusicCity. "The landmark Betamax case taught the world that copyright ownership does not confer veto power over the development of technologies with varied uses, so long as those technologies are capable of substantial non-infringing uses. In the end, Hollywood learned how to profit from the new videotape recorder technology."

Peer-to-peer file-sharing technology platforms like Morpheus are not only capable of noninfringing uses, but are being used for noninfringing purposes today.

The case, captioned Metro-Goldwyn Mayer v. Grokster, No. 01-CV-8541 SVW, is before Judge Stephen V. Wilson, U.S. District Court Judge for the Central District of California in Los Angeles. Case documents also name as defendants Consumer Empowerment and Grokster, two companies that distribute peer-to-peer file-sharing software built on the same technology as Morpheus. No court dates have been set in the case.

Documents related to Metro-Goldwyn Mayer v. Grokster, including the complaint filed in October:

U.S. Supreme Court ruling in the Betamax case, Sony Corp. of America v. Universal City Studios, Inc.: http://www.law.cornell.edu/copyright/cases/464_US_417.htm

EFF Campaign for Audiovisual Free Expression: http://www.eff.org/cafe/