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Supreme Court Girds For File-Sharing Versus Copyright-Infringement Suit

The crux of MGM Studios v. Grokster is whether the software distributed by Grokster and StreamCast Networks is being used for illegal copying purposes or whether it allows for "substantial non-infringing use" of information outside of copyright law.

After wending its way through lower courts, the file-sharing case known as MGM Studios v. Grokster will come before the Supreme Court Tuesday with the industries on both sides of the case -- entertainment and technology "- predicting victory.

Specifically, file-sharing distributors Grokster and StreamCast Networks' Morpheus are facing off against the movie and recording industries, which maintain that software distributed by the two firms is being used for illegal copying purposes and should be declared illegal. "Grokster and StreamCast cannot escape the reality that copyright infringement is their business," recording industry lawyers have contended in court filings.

The file-sharing distributors, however, take an opposing position, arguing that file-sharing is a "substantial non-infringing use" of technology making information outside of copyright law available to the computing public.

A lower court decision in April 2003 ruled that file-sharing companies are not liable for any copyright infringement carried out by users of their software. The 9th U.S. Circuit Court of Appeals upheld the lower court, setting the stage for the Supreme Court to review the case. The appeals court based its decision on the 1984 Sony Betamax case which was deemed "capable of substantial non-infringing uses" although it could be used for copyright infringement.

If the recording and movie interests lose the case before the Supreme Court, the industries have indicated they will continue suing individuals for what they call illegal file-sharing. The entertainment industry is also expected to take the issue to Congress eventually.

In another case scheduled to come before the Supreme Court Tuesday, the justices will be asked to decide whether cable companies should be required to lease their lines to competitors who want to provide Internet broadband service. The case under review by the high court -- involving an ISP called Brand X -- also comes from the 9th Circuit, which had knocked down an FCC interpretation that broadband cable service was a data service that shouldn't be subject to telecommunications regulation.

The Supreme Court is expected to release its opinions in the two cases in June.

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