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US court blocks tactic against music pirates

The recording industry’s efforts to crack down on online music piracy in the US suffered a significant setback Friday when a federal appeals court ruled that tactics the industry has used to identify file-swappers violated the law.

The ruling coincided with another blow to record labels in Europe as a Dutch court ruled that Kazaa, provider of the most popular file-sharing software, could not be held accountable for copyright violations of its users.

The surprising US ruling casts a shadow over the aggressive legal campaign the Recording Industry Association of America has waged against consumers who share unauthorized music files through peer-to-peer sites such as Kazaa.

The recording industry has argued that online music piracy is a primary reason CD sales in the US have fallen by more than 30 per cent over the past three years. The RIAA has used administrative subpoenas to force Verizon Communications and other internet service providers to identify customers suspected of sharing large numbers of music files over the internet.

Verizon challenged those tactics, arguing the RIAA was overstepping the law and violating consumers’ privacy. A lower court earlier this year ruled in favour of the industry, allowing the RIAA to unleash hundreds of lawsuits against suspected music pirates.

But in a unanimous ruling, a three-person panel of the District of Columbia appeals court on Friday sided with Verizon, stating the 1998 Digital Millennium Copyright Act did not give copyright holders the right to subpoena customer names from ISPs without filing a formal lawsuit.

The RIAA vowed to press forward to its campaign, suggesting the appellate ruling would force the industry to become more aggressive with suspected online pirates.

“(The ruling) unfortunately means we can no longer notify illegal file sharers before we file lawsuits against them to offer the opportunity to settle outside of litigation. Verizon is solely responsible for a legal process that will now be less sensitive to the interests of its subscribers who engage in illegal activity,” said Cary Sherman, president of the RIAA.

The RIAA did not immediately indicate whether it would appeal against the ruling to the US Supreme Court.

The Dutch ruling was similar to a decision from a US federal court earlier this year, which found that Grokster and Morpheus, file swapping software providers similar to Kazaa, could not be held accountable for copyright violations of their users.

The Dutch ruling came only days after a Nielsen//NetRatings study found that Kazaa is now more popular in Europe than in the US. The study also noted that use of Kazaa had declined in the US since peaking in March, just before the RIAA launched its anti-piracy effort.

Sarah Deutsche, Verizon general counsel, said the appellate court ruling was “a very important victory for all internet users” whose rights were being violated by the RIAA’s campaign.

The ruling would likely force the RIAA to start filing “John Doe” lawsuits against unnamed defendants in order to obtain subpoenas requiring the ISPs to identify suspected online music pirates.

Ms Deutsche said the “John Doe” process would take more time and provides ISP subscribers with much stronger legal protection. “It’s a more protective process. Speed is not the only issue here. There are other rights that have to be considered,” she said.

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