The settlement comes four months after the US Supreme Court
ruled that Grokster and StreamCast Networks, two firms that provide
peer-to-peer file-sharing software, could be sued for copyright
infringement carried out by users of the software, because they had
intended it to be used for that purpose.
The landmark decision has already been followed by similar
international rulings in Korea, Australia and Taiwan.
According to the Recording Industry Association of America
(RIAA), the settlement includes a permanent injunction prohibiting
infringement – directly or indirectly – of any of the music
industry’s copyrighted works. Grokster was also required to
immediately stop distributing its client application or operating
the Grokster system and software.
Customers who have already downloaded the software will still be
able to use it, although they will still face the risk of action
from the RIAA, which has already sued over 15,000 file-sharers.
Grokster will also pay $50 million in damages, according to the
San Francisco Chronicle.
“This settlement brings to a close an incredibly significant
chapter in the story of digital music,” said Mitch Bainwol,
Chairman and CEO of the RIAA. “This is a chapter that ends on a
high note for the recording industry, the tech community and music
fans and consumers everywhere.”
However, while Grokster is turning over a new leaf, the original
dispute continues. StreamCast, the company behind the Morpheus
file-sharing software, has vowed to fight on. It denies inducing or
encouraging copyright infringement and continues to offer Morpheus
as a free download.
In contrast, Grokster’s website contains a short message to
users today: “There are legal services for downloading music and
movies. This service is not one of them.”
It adds, “Grokster hopes to have a safe and legal service
available soon.”
The firm is planning to launch a legal, fee-based P2P service
within the next few months, called Grokster 3G. According to
reports, this will be under the wing of a new parent company –
expected to be Mashboxx, a firm run by former Grokster President
Wayne Rosso.
In June, Mashboxx announced a deal with Sony BMG Music
Entertainment to introduce files into existing P2P networks that
would allow users to listen to an entire song for a limited number
of plays before deciding to purchase for $0.99 per track.
