Anti-Piracy Case Could Harm Innovation -Groups

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WASHINGTON - Efforts to stamp out online copying of music and movies could give Hollywood a veto over new technology and stifle innovation, file-trading software companies and their supporters told the Supreme Court on Tuesday. If "peer to peer" software companies like Grokster and Morpheus are held liable when their users download material without permission, the entertainment industry will effectively dictate to technology companies how to design products that handle their material, they said on the day filings were due in a much-anticipated case before the high court. And copyright holders have long sought to quash innovations from the printing press to the videocassette recorder to the CD burner that they have found threatening, they argued. "How many times has the entertainment industry cried wolf?" said Streamcast Networks CEO Michael Weiss, whose company produces the Morpheus peer-to-peer program. Entertainment industry advocates said in a conference call that they don't oppose innovation, only companies designed to profit from the illegal copying of their works. "We support anything that gets more people to see our movies, as long as they support property rights. The Grokster model doesn't promote property rights -- it promotes stealing," said Dan Glickman, president of the Motion Picture Association of America.

The Supreme Court is expected to hear oral arguments in the case on March 29, with a ruling due by June. Lower courts have ruled that peer-to-peer makers shouldn't be held liable because, like VCR manufacturers, they make copyright violations possible but can be used for legitimate purposes as well. Millions of people each day use Grokster and other peer-to-peer programs to copy material directly from each others' computers. Recording labels and movie studios believe the practice cuts into their sales and have sued to hold the companies responsible for copyright infringement. They have also sued individuals for distributing their material without permission over peer-to-peer networks. The software is used by the U.S. Department of Transportation to communicate with its remote offices, and musicians who want to encourage their fans to trade concert recordings, boosters said. Grokster supporters include consumer electronics makers, technology-industry trade groups, consumer groups, venture-capital firms, and Internet service providers.

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