In April this year Judge Stephen Wilson threw out the case against Streamcast Networks, the company behind the Morpheus file-sharing software, and Grokster Ltd, saying they "are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights."
The ruling was a major blow for the music industry, which had become used to winning most of its internet music battles since it first began the war with a lawsuit against Napster in December 1999. Napster ultimately collapsed under the cost of litigation, and the Recording Industry Association of America (RIAA) has pursued successor networks. Unfortunately for the RIAA, they operate in a manner significantly different to Napster.
Napster required users to connect to its servers to identify the files that could be downloaded from another user's home computer, a system known as centralised P2P. Grokster and Morpheus are decentralised, meaning that once the users have the networking software, they no longer need to connect to the companies' servers to access other users' computers. Accordingly, the companies do not know what files are being exchanged, and cannot stop the network operating or exercise control over user activity.
The RIAA's President, Cary Sherman, announced on Tuesday that the appeal had been lodged. In a statement he said that Judge Wilson had erred, adding, "These are businesses that were built for the exclusive reason of illegally exchanging copyrighted works, and they make money hand over fist from it. The Court of Appeals should hold them accountable."
The RIAA has also been seeking to hold the file-swappers themselves accountable. It announced in June that it would be turning its attention to individual pirates, not just the file-sharing networks. Since then it has served a flood of subpoenas under the controversial US Digital Millennium Copyright Act (DMCA), ordering ISPs to identify targeted individuals. Over 1,075 of these subpoenas have now been issued, and it is anticipated that the first cases will be filed next month.