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Senate to Examine MGM vs. Grokster Ramifications
July 28, 2005
Thomas Mennecke
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The effects of the June 27th Supreme Court ruling has so far had a wide range of influence, at least in the United States. LimeWire has maintained a "no comment" policy in regards to their destiny, while BearShare has closed its forums. Neo-Modus, the development team behind DirectConnect, has mysteriously disappeared.

Luckily, LimeWire and BearShare are part of the Gnutella network which is an open source community. Likewise, Neo-Modus' DirectConnect is a relatively minor player in the DirectConnect network. Nevertheless, commercial P2P companies are finding times difficult in America.

While some in the copyright industry may shun P2P developers, it has proven to be a valuable asset in the march of technological innovation. Although the Supreme Court did not give the MPAA and RIAA and outright victory in its ruling, it did leave a lot of unanswered questions. How far can a P2P company go and not cross the line into encouraging copyright infringement? What exactly determines this?

With more questions than answers to the June 27th ruling, it has become apparent a third party may be able to shed light on the situation. And indeed, the Senate Committee on Commerce, Science & Transportation will convene all the major players to testify this afternoon at 2:30 PM EST.

The Senate Committee on Commerce, Science & Transportation has no jurisdictional authority, nor are there any bills pending or being introduced that will seek a balance between technological innovation and protecting intellectual property rights. However, this committee meeting may prove useful as it may serve as a foundation for upcoming legislation.

The hearing will bring witnesses from both sides of the file-sharing debate. Mr. Adam Eisgrau Executive Director, P2P United will provide testimony in defense of file-sharing. In addition, the Distributed Computer Industry Association (DCIA) will be providing written testimony in support of file-sharing.

Conversely, Mitch Bainwol Chairman & CEO of the RIAA and Fritz Attaway
Executive Vice President of the MPAA will also provide testimony.

What will this meeting accomplish…interesting question. For the longest of times, the two sides have been so polarized in their positions that any type of agreement or settlement seemed impossible. The RIAA has demanded that P2P developers incorporate filtering and DRM (digital rights management), while P2P developers have refuted the feasibility of such an option and demanded licensing rights. This core stipulation has been perhaps the greatest stumbling block to achieving a settlement and putting years of litigation behind.

But it appears that after the Supreme Court ruling, there just might be some light at the end of the tunnel. Recently, Mitch Bainwol was quoted by CNN, suggesting the RIAA is ready to move on and negotiate a settlement with the major P2P players.

“To the P2P operators, the LimeWires and the eDonkeys: We want to work with you,” Bainwol said in an interview to CNN. “This is time to come forward and start filtering. We can build a better digital age together.”

Sounds great, is the DCIA and P2P United on board? To some extent. In written testimony provided to by the DCIA and P2P United, both lobby groups are ready to move on licensing agreements by incorporating micropayment systems and prioritizing DRM content. But filtering copyrighted content still appears off the table, according to the DCIA.

“We should clarify that our vision for that expansion does not center on filtering copyrighted works out of the P2P environment, but rather on deploying commercial and technical solutions, which the vast majority of rights holders will find attractive, for secure licensed and profitable redistribution of such works via file sharing.”

Indeed, both P2P United and the DCIA crave to bring their business model out of the gray market and into the light. The RIAA and MPAA want to work with P2P, while P2P United and the DCIA want to work with the RIAA and MPAA. Finding common ground has been difficult, but the recent Supreme Court decision may have given P2P developers just enough leverage to strike a licensing deal with the copyright industry.

The ultimate goal of today's meeting is for the Senate Committee to gauge the ramifications of the MGM vs. Grokster decision. Indeed if the Senate agrees with the testimony provided by P2P United and the DCIA, we could well be on our way to witnessing a licensing agreement between the two sides.

Testimony links (all PDF):

You can read the DCIA's testimony here.
You can read Digital Container's testimony here.
You can read Scooter Scudieri's testomony here.

This story is filed in these Slyck News categories
Legal/Courtroom :: Court Rulings/Decisions
P2P Clients :: Other Gnutella Clients
Entertainment Industry :: Other

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