The copyright industry tightens the screws on illegal peer-2-peer file swappers, swapping sites and software that facilitates file swapping

December 2005

Record labels, music publishers, internet

Following on from the success of the MGM v Grokster case in the USA (Law Updates August2005) and other successes against peer-2-peer websites offering illegal download files (including cases in Australia, Korea and Taiwan) there have been a rash of recent news stories reinforcing the improving position of record labels, music publishers and film companies – although all still against a background of heavy piracy in illegal downloading and file swapping. iMesh has becomes the first of the ‘illegal’ P2P service to go legal (although UK based already offered a legal swapping service to its subscribers). iMesh’s new software blocks any music with a copyright from being downloaded. The service will charge using the subscription model, charging users $6.95 per month. However the real challenge will be to tempt the 5 million users of the old version that allowed free sharing to pay. In the week preceding the announcement the old version of the software was downloaded over 1.5 million times. In Hong Kong a magistrates court has convicted a man of attempting to distribute film content over the BitTorrent P2P network. Chan Nai-ming, from Hong Kong, received a three (3) month jail sentence after being found guilty of three charges (one charge per film) under S118(1)(f) of theCopyright Ordinance for attempting to distribute an infringing copy of a copyright work to such an extent as to affect prejudicially the rights of the copyright owner. The penalty for this criminal offence carries a maximum fine of HK$50,000 for each infringing copy and a maximum prison sentence of 4 years. He is the first person in the world to be convicted for distributing films via a P2P network (in this case Bit Torrent). In China the number one search engine, Baidu, had reportedly removed all links to sites offering free MP3’s after pressure from the music industry despite the fact that these searches provided a large proportion of the companies business. However it appears that whilst direct links have been removed, a search by a user would still find ‘free’ music. Baidu have countered with a disclaimer on its site saying that “Baidu itself does not store, control, edit or revise information contained in the linked webpages. We highly value the protection of intellectual property rights. If any authors or copyright owners find the links infringe your rights, Baidu will take measures to remove alleged webpage content or block these links in accordance with relevant laws”. Last month, Sony BMG Music Entertainment, Warner Music Group Corp, EMI Group Plc and other music companies filed lawsuits against Baidu seeking to stop it from offering the service (LawUpdates October 2005 – Major labels seek to outlaw Chinese search engine). Finally, and four months after the US Supreme Court’s landmark decision, Grokster has closed. A statement on the site ( says: “There are legal services for downloading music and movies. This service is not one of them”. It also gives details of its proposed new legal version, Grokster3G ( The service is said to be in settlement talks with the RIAA as is Morpheus. However in Korea Soribada – only recently forced to close the Soribada P2P service – says it is launching new ‘open’ P2P software in defiance of the record industry.,,2-1841351,00.html

and see Law Updates October 2005 Australian Court rules that Kazaa file swapping software is illegal: Universal Music of Australia Pty Ltd vs Sharman License Holdings (2005) whilst other P2P companies review strategies in light of the Grokster decision

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