The Recording Industry Association of America Settles Its Lawsuit Against Israeli File-Swapping Company iMesh

September 2004

Music Publishers, Record Labels, Internet

The RIAA has settled its lawsuit against iMesh for damages of $4.1 million. The organisation sued iMesh last September, charging that the company was contributing to copyright infringement on a massive scale. As a part of the deal, iMesh has agreed to move to a business model that “abides by U.S. copyright laws,” the RIAA said. The RIAA has had some notable successes against file swapping services effectively closing down the then illegal Napster and Aimster (and ‘madster’). However the RIAA has not always had such success and In April 2003 Judge Stephen Wilson, a federal judge in Los Angeles, handed a stunning court victory to the file-swapping services Streamcast Networks and Grokster, dismissing much of the record industry and movie studios’ lawsuit against the two companies. In an almost complete reversal of previous victories for the record labels and movie studios, federal court Judge Stephen Wilson ruled that Streamcast -parent of the Morpheus software – and Grokster were not liable for copyright infringements that took place using their software. The ruling does not directly affect Kazaa, software distributed by Sharman Networks, which has also been targeted by the entertainment industry. “[the] Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends,” Wilson wrote in his opinion. “Grokster and StreamCast 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. This case follows a similar decision in the Netherlands last year that found that Kazaa was not liable for its users’ copyright infringements (BUMA/STEMRA v Kazaa BV). The Supreme Court of Canada has also released Internet Service Providers from the responsibility and legal liability for individual file swapping (see Law Updates August 2004) and has the US Court of Appeals (CoStar Group v Loopnet). In a partial response to that decision, the RIAA has shifted much of its recent legal activity toward suing individual file swappers rather than peer-to-peer companies but is extensively lobbying for new legislation in the United States of America. The label group previously settled with Audiogalaxy, which ultimately distributed Rhapsody, RealNetworks’ subscription-based music service. iMesh was the fifth most popular piece of software last week on, a software aggregation site owned by publisher CNET Networks. The software has been downloaded more than 76 million times, according to the site’s records.

Law Updates June 2004 (Dutch Court Clears Search Engine of Infringement)
Law Updates March 2004 (RIAA Actions Against Individual File Swappers)
Law Updates February 2004 (Dowloading is Legal in Canada)
Law Updates February 2004 (Kazaa v BUMA/STEMRA)
Law Updates February 2004 (Verizon Win Appeal)
Law Updates January 2004 (Record Industry Suffers Three Major Setbacks)
Law Updates December 2003 (Australian ISP Faces Claim for Infringement)
Law Updates June 2003 (RIAA v Morpheus & Grokster)
Law Updates February 2003 (RIAA v Aimster)

Also see the article by Professor Michael Geist – ‘A Blueprint For A Better Copyright Law’ for the Toronto Star at : see the US appellate court update on Streamcast and Morpheus below.

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