The settlement comes four months after the US Supreme Court ruled that Grokster and StreamCast Networks, two firms that provide peer-to-peer file-sharing software, could be sued for copyright infringement carried out by users of the software, because they had intended it to be used for that purpose.
The landmark decision has already been followed by similar international rulings in Korea, Australia and Taiwan.
According to the Recording Industry Association of America (RIAA), the settlement includes a permanent injunction prohibiting infringement – directly or indirectly – of any of the music industry’s copyrighted works. Grokster was also required to immediately stop distributing its client application or operating the Grokster system and software.
Customers who have already downloaded the software will still be able to use it, although they will still face the risk of action from the RIAA, which has already sued over 15,000 file-sharers.
Grokster will also pay $50 million in damages, according to the San Francisco Chronicle.
“This settlement brings to a close an incredibly significant chapter in the story of digital music,” said Mitch Bainwol, Chairman and CEO of the RIAA. “This is a chapter that ends on a high note for the recording industry, the tech community and music fans and consumers everywhere.”
However, while Grokster is turning over a new leaf, the original dispute continues. StreamCast, the company behind the Morpheus file-sharing software, has vowed to fight on. It denies inducing or encouraging copyright infringement and continues to offer Morpheus as a free download.
In contrast, Grokster’s website contains a short message to users today: “There are legal services for downloading music and movies. This service is not one of them.”
It adds, “Grokster hopes to have a safe and legal service available soon.”
The firm is planning to launch a legal, fee-based P2P service within the next few months, called Grokster 3G. According to reports, this will be under the wing of a new parent company – expected to be Mashboxx, a firm run by former Grokster President Wayne Rosso.
In June, Mashboxx announced a deal with Sony BMG Music Entertainment to introduce files into existing P2P networks that would allow users to listen to an entire song for a limited number of plays before deciding to purchase for $0.99 per track.
