Sony Eyes Grokster Version Despite Court Ruling

By Derek Caney

Sony BMG's chief executive said on Monday the record label wants to move forward with a legal version of the Grokster file sharing service, despite a U.S. Supreme Court decision that holds the service and others like it responsible for the copyright infringement of its users.

The highest court in the United States set aside a lower court ruling that Grokster and Morpheus, which allow millions of Internet users to copy music and movies for free from each others' computers, were not liable for infringement since the services could also be used for legitimate purposes.

"I'm hopeful we will move forward with a legitimate version of Grokster," Andy Lack, chief executive of Sony BMG Music Entertainment, said in an interview. "It won't be called Grokster, and it certainly won't be what Grokster is today," he added.

A Grokster spokesman said, "File sharing is not going away regardless of today's developments so talks like this only make sense and seemingly further validate its popularity in the marketplace."

Sony BMG's Lack said the ruling in the MGM vs. Grokster case would open up opportunities for different technologies that use so called peer-to-peer networks, which allow digital media files o be shared between individual computer users without a centralized server.

"There's an opportunity to employ lots of different technologies that legitimize these file sharing services," Lack said. "A lot of them didn't want to come to the table until this ruling."

Asked if the ruling would lead to a rash of lawsuits against peer-to-peer networks, he said, "If I were a lawyer representing those clearly illegal services, I'd be advising my clients either make a dramatic change in the way those companies are doing business or get out of business."

Lack said the most striking aspects of the decision were that it was unanimous and transparent. "Everyone on both sides of the debate -- be it content companies or Grokster -- feared there would be no clarity. The most challenging concern is that the decision would be open to interpretation. This decision pre-empts that kind of debate."

Sony BMG, home to such artists as Bruce Springsteen and Britney Spears, is working with several other technology companies to create a legal file sharing network.

One such company, Snocap, makes software that can block unauthorized songs from being copied through peer-to-peer services. The technology is the latest venture of Shawn Fanning, who created Napster, the grandfather of all peer-to-peer sites.

Sony BMG is also working with Mashboxx, a peer-to-peer network that offers authorized songs for download. Its chief executive, Wayne Rosso, is a founder of Grokster.

Sony BMG is a 50-50 joint venture between Japan's Sony Corp. and Germany's Bertelsmann AG.

Copyright 2005 Reuters Limited.

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[TELECOM Digest Editor's Note: Did I read correctly earlier today that the Supreme Court has stated even techologies for which legitimate uses are available are not excused from lawsuits if they (the technologies) are misused? PAT]
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Lisa Minter
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