Dutch Supreme Court Declares Kazaa Is Legal

Distributing software for sharing files on the Internet is legal even if the application is being used for illegal activity, the Supreme Court of The Netherlands ruled last Friday.

In upholding a lower court ruling, the high court found that Sharman Networks, maker of the Kazaa file-sharing application, did not infringe on the rights of music and movie copyright holders by distributing its application on the Web.

In a statement, Sharman's founders, Niklas Zennstrom and Janus Friis, hailed the decision as a "historic victory for the evolution of the Internet and for consumers."

Flawed Judgment

The IFPI, an industry group that represents the international recording industry, saw the decision in a different light. "The Dutch judgment is flawed because it was based on a one-sided presentation of the facts as put forth by Kazaa," IFPI general counsel and executive director Allen Dixon said in a statement. "We believe that any full airing of the facts would produce a different decision."

"In any case," he added, "this decision has no bearing at all on the single most important fact, which is that people who are distributing copyrighted music over such systems -- and that means the vast bulk of all users -- are breaking the law."

In a statement, the IFPI dismissed the Dutch ruling as "of minor importance," one that will be overtaken by future decisions -- most notably an appeals case pending in California.

Ban Cars for Speeding?

In that case, which is expected to be heard in February, the U.S. music and movie industries are trying to reverse the ruling of a lower court judge who came to the same conclusion about file-sharing software as the Dutch justices.

"The question in both these cases is whether or not the software companies should be held responsible for what users may be doing," Electronic Frontier Foundation attorney Fred von Lohmann told TechNewsWorld. "It's sort of the same as asking should Ford remain responsible for people speeding in their cars? The courts in the United States have said, no, the technology companies should not be held responsible."

The Dutch case differs slightly from the pending U.S. one in that Buma/Stemra, which represents the Dutch recording industry, sought to stop Kazaa from allowing free downloads from its Web site or face a fine of US$124,000 per day.

"There's still the possibility that the music industry could sue Kazaa for copyright infringement, since the Dutch ruling was about an injunction to stop distribution of the software until a full trial could occur," von Lohmann said.

Far-Reaching Decision

The judgment in The Netherlands could be more far-reaching than the recent Verizon decision in the United States, which curtailed the recording industry's power to issue subpoenas against alleged music pirates, asserted Wayne Rosso, CEO of Optisoft, a file-sharing networking company in Madrid, Spain. "Now, not only has an American court rejected the recording industry's claims, but ... the respected Supreme Court of a European nation has rejected those claims," he told TechNewsWorld.

He added that the decision also is sending a message to the European Parliament in Brussels, Belgium, which is considering a "directive that makes the [Digital Millienium Copyright Act] look like an 'A' ride at Disney World." With this ruling, he contended, the EU Parliament won't be too enthusiastic about backing that directive.

In its statement on the Dutch judgment, the IFPI called on Kazaa to "act responsibly and deal with the ongoing infringements taking place via its service" by changing the default settings of its software, notifying users that uploading copyrighted music without permission is illegal, and filtering its service to prevent sharing of copyrighted works.

Patently Absurd

Operators of file-sharing networks have heard that "act responsibly" tune in the United States, too, observed Adam Eisgrau, executive director of P2P United, a Washington, D.C.-based organization representing peer-to-peer providers. "This is clearly a coordinated international campaign to type an entire technology and an industry built around it as irresponsible," he told TechNewsWorld.

He cited a recent letter from the General Accounting Office (GAO), a watchdog agency of the U.S. Congress, stating that the decentralized architecture of peer-to-peer networks makes it very difficult to monitor what is shared on them.

"There is this PR battle being fought by the industry to not deal with the substance and to defeat the technology by suggesting that the people who design it and make it available to the public are irresponsible, that they're not to be taken seriously," he said. "That is patently absurd, as is filtering for copyrighted content."