Life After Grokster

October 24, 2006

Modern technology has dramatically increased the ease with which everyone can enjoy copyright protected works. With such convenience has arisen the challenge of balancing the protection of intellectual property rights of such works with the fostering of new innovation. This is the challenge in today’s digital age.


One area where the challenge is arising is that of peer-to-peer file sharing. This has been the subject of much attention, both in technical circles and in the media particularly following the judgment of the US Supreme Court in June 2005 which held an Internet peer-to-peer file sharing service liable for indirect copyright infringement.


This article examines how the law relating to peer-to-peer file sharing has developed in the United States, explores the approaches of certain Member States of the European Union to this controversial issue and considers the wider implications for peer-to-peer operations.


Peer-to-peer Network


By way of background, a peer-to-peer network enables the sharing of files between users of any given peer network. This usually involves a user being a member of a given network by way of software applications the user holds on their computer. Networks differ in their operation, a fact usually determined by the involvement or indeed existence of a central server. The purest form of peer-to-peer network does not involve a central server at all, but merely a connection between users.


Users are equal in status and facilitate each other by sharing the capabilities of their bandwidth as well as files which can result in the infringement of intellectual property rights such as copyright.


There are two grounds on which a party can be sued for copyright infringement: (a) direct infringement or (b) indirect infringement. Direct infringement actions target those who are engaged in illegal use of copyrighted works (namely the end-user). While end-users may be an easy target for copyright owners, it is often not economically feasible to track down and sue thousands (or even millions) of such users.[1] Accordingly, it is usually preferable for copyright owners to target those who facilitate direct infringement. However, imposing liability may be difficult when a provider’s goods or services (which are used by a direct infringer) have lawful and unlawful uses.




Pre June 2005

Indirect infringement has become the most effective method in controlling widespread end-user infringement activity.  There are two grounds for indirect liability.  A copyright owner can sue for (a) vicarious liability if the indirect infringer failed  (where possible) to patrol its system and exclude access to potentially infringing files; and/or (b) contributory liability if the infringer knows of (or suspects) the direct infringement and materially contributes to the infringement.


Contributory liability requires knowledge on the part of the accused of the direct infringement. This was previously an objective standard of knowledge, ie that the defendant knew or ought to have known of the infringement, actual or apparent knowledge. However, the issue of actual and constructive knowledge has, in recent litigation, become less clear-cut. The majority decision of the Supreme Court in Sony Corporation of America v Universal City Studios Inc.[2] (“the Sony case”) was not prepared to impute constructive knowledge to Sony. Instead the Court focussed its attention on a doctrine derived from patent law known as the ‘staple article of commerce doctrine’ which attempts to balance the protection of copyrighted works and the rights of those who hold them against the rights of others to innovate and engage in commerce.


The Court found that the sale of recording equipment, which amongst other functions enabled a user to infringe copyright, would not constitute infringement where the product was widely used for legitimate, unobjectionable purposes. It was on this basis that the majority of the Supreme Court in Sony held that Universal had failed to demonstrate that the recording equipment at the centre of the case was capable of substantial infringing uses, thereby avoiding any contributory liability for copyright infringement.


Further examination of the knowledge requirement in A&M Records Inc. v Napster Inc[3] saw the Ninth Circuit stating that, in order to find contributory liability in an online context, there must be knowledge of specific acts of infringement by a third party. It was this knowledge of infringing materials on the Napster system, along with the ability and opportunity to purge such material from the system and Napster’s failure to do so, which helped the Court to find Napster liable for contributory infringement.


The requirement of knowledge of specific acts of infringement introduced by the Ninth Circuit in Napster was deemed incorrect by the Seventh Circuit in a subsequent action taken by copyright holders against the providers of internet services, Aimster.[4] The court noted that while constructive knowledge is not sufficient for a finding of contributory liability, wilful blindness in copyright law will amount to knowledge. Thus a company which knows or suspects users of their system are infringing copyright will not automatically be precluded from liability by claiming, as occurred in Aimster, that their encryption technology precluded them from knowing their users were copying songs.


Post June 2005


Developers and distributors of new products and services find themselves in an uncertain legal position following the decision of the US Supreme Court in Metro-Goldwyn-Mayer Studios Inc. et al v Grokster Limited et al.[5] As the decision in that case turned largely on its facts, with many questions unanswered, the innovators of emerging technologies are now uncertain whether their developments infringe US copyright law.   


The US Supreme Court decision in Grokster was unlike previous litigation against the providers of file-sharing facilities to the extent that the operation of the network system was distinguishable from those which had been the subject of previous copyright challenges. The network, unlike in Napster, contained no central server managing lists of files, the system was a hybrid network. The involvement of the defendants was limited to their provision of the software enabling end-users to establish network connections with other computers running the network software.


The Court established that the circumstances in Grokster differed from those in Sony, the only other consideration of contributory liability by the Supreme Court, in the sense that in Sony there was no evidence of any stated or indicated intent to promote infringing uses. The Court found that the lower courts had erred in their broad interpretation of the Sony case that substantial non-infringing uses of a product along with an absence of actual knowledge of any infringement would exempt the software providers in the case from secondary liability. It seems that the knowledge requirement has been replaced with intention.


The Court stated that the substantial non-infringing uses doctrine, as applied in Sony, did not preclude a finding of secondary liability where there is evidence of intent and statements or actions directed to promoting infringement. Unfortunately, the manner in which ‘substantial’ is to be determined was not addressed definitively, much to the dismay of legal commentators.


It is this inducement factor, a doctrine derived from patent law, on which the judgment is built. The finding of contributory liability on the part of the defendants was based on evidence of the promotion of their product as a means for infringing copyright. The Court noted that there is no need to prove any causative link between the inducement and any acts in contravention of copyright.  Therefore, one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.  However, the judgment acknowledged that mere distribution, including acts incidental to such distribution (eg technical support or updates), even with knowledge of infringement, would not be sufficient for a finding of liability. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise.  It should be noted that Grokster has agreed to shut down its service and pay $50 million.  This settlement does not affect other defendants in the case who continued the lawsuit.[6] One such defendant was StreamCast, who produce the file-sharing Morpheus software. Since Grokster, StreamCast have been held liable for secondary infringement under the inducement theory, however this decision may be subject to an appeal.


The resultant finding of liability in Grokster is a benchmark on which future cases will be argued. In this regard, it is interesting to note the infringement proceedings filed in New York on 4 August 2006 by a number of record companies against operators of a large peer-to-peer system, Lime Wire LLC and Lime Group LLC.[7]  The CEO and CTO/COO were also named as defendants. The record companies have separated their complaint into the three distinct theories for indirect liability: contributory copyright infringement, vicarious copyright infringement and inducement of copyright infringement.  It will be interesting to see what the outcome of the case will be in the new legal landscape.




To date, there has been no case in France which is equivalent to that of Grokster.  To the author’s knowledge, legal actions to date have only been against the users of peer-to-peer software.


The current legal landscape in France surrounding peer-to-peer file sharing and the distribution of software does not expressly support the possibility of a similar finding to that Grokster were the case to come before a French Court.  There are a number of reasons for this.


Firstly, in Grokster, the Supreme Court did not come to a conclusion on the admissibility of peer-to-peer software.  However, the Tribunal de Grande Instance de Paris, the highest court of appeal, has held that file sharing through a peer-to-peer network is legal.[8] The finding of legality was based on the private copying exception to copyright which exists under current French law.[9] Taxes levied on blank media are imposed to balance the rights of the copyright holder for loss of revenue which may result from private copying.


Secondly, in Grokster, the Court placed focus on determining whether the defendants intentionally encouraged infringement by inducement. There is no offence of copyright infringement by inducement under the French Intellectual Property Code. The only equivalent action in France would be under the French criminal code.  To succeed with such an action, it would be necessary to prove the fraudulent intention of the software provider (and not that of the users).  In practice, the burden of proof is difficult to meet when the software provider can demonstrate their true intentions.  Also, it should be noted that, unlike in the United States, the “discovery” procedure which gives access to confidential documents in order to show the true intentions of the provider does not exist in France.


The situation may however have changed with the adoption of the DADVSI bill[10] by the French Parliament on 30 June 2006 under which it will be possible to sue a software provider who encourages infringement.  The law will introduce Article L.335-2 into the penal part of the Intellectual Property Code.  Its aim is to make software providers criminally liable where they knowingly publish, make available to or communicate to the general public, in any form whatsoever, software obviously intended to provide unauthorised access to protected works or objects; liability also arises if they knowingly encourage, including through advertisements, the use of such software. The objective of the DADVSI bill is to punish those companies that promote the use of its product to commit copyright infringement. Companies that publish, put at the disposal of or communicate to the public software aimed at placing copyrighted materials at their disposal will be subject to a fine of €300,000 and/or imprisonment for up to three years.


A constitutional challenge to the bill was filed on 7 July 2006 claiming it was unconstitutional based on the ‘Declaration of the Rights of Man and of the Citizen’. Amongst the claims of unconstitutionality of the Bill was the infringement on the rights of the citizen on the basis that the Bill provided for the criminalisation of software distribution designed for the spread of copyrighted works but that the Bill did not define this action with sufficient parameters. Neither, it was contended, did the Bill adequately define the exceptions to the prohibition. The French Constitutional Council gave its ruling on the constitutional challenge on 27 July 2006.   The Council did not strike down the law entirely.


The Bill, as challenged, had provided an exemption to the liability of software providers introduced into Article L.335-2. The exemption protected the developers of software meant for collaborative work, search or exchange of files of objects that were not subjected to the remuneration of the author. The Council erased this exemption from the proposed Article leaving only the liability previously mentioned.  While the text in its original format meant uncertainty as to whether providers of peer-to-peer software could be liable, it is now certainly more plausible that French software developers and providers will be found liable for copyright infringement.


Another exception which was erased from the Bill by the Constitutional Council was the exception which exempted the individual users of file sharing services from criminal sanctions. As a result, individual file sharers who are deemed to have infringed copyright now face heavy criminal sanctions alongside companies who earn revenue on the basis of copyright infringement. The French Minister for Culture and Transport, in his response to the Council’s decision, has stated that he will urge the Minister for Justice to ensure prison sentences are not handed down to individual infringers. The law was signed into effect on 3 August 2006.




Like some other European countries, the German legal system does not expressly provide for secondary liability for copyright infringement. In principle, the distribution of file sharing software does not per se entail liability for infringement by third parties by use of such software. There is, however, a tortious duty which imposes indirect liability where actions or omissions of a party contribute to the infringement of copyright by the third party. Factors determining the extent of the duty of care include the probability or anticipation of infringement by third parties by means of the product/software distributed, the control that can be exercised over the acts of infringement and any financial interest of the indirect infringer in the acts of the direct infringer.


The current position regarding file sharing in Germany is that file sharing is legal where the file sharer holds all rights or at least the right for online distribution in the work which he shares. Thus the uploading of files for which the uploader does not hold a license to reproduce is illegal. The act of downloading has different legal consequences however. The private (no direct or indirect use for commercial purposes) copy exception which operates in Germany applies to the making of a copy of a copyrighted work, for private

use, unless the copy is made from a copy which is apparently/obviously/evidently illegal or unlawful. Where the copy is evidently an unlawful copy of the work, copying of that material will not fall within the realms of the private copy exception. The private copy exception does not apply to databases.


In March 2006, the upper house of the German government (Bundesrat) approved preliminary readings of a new copyright bill which will take effect, once it is fully debated and voted upon.  The author is not aware of when this will be. The proposed law is the ‘second law governing the regulation of copyright law within the information society’ which will ensure that file sharers who download copyrighted music or films are liable under German criminal law. Making such files available to the public will also come within the new Act. It is therefore an open question whether the distributors of file sharing software will be liable under this part of the proposed new law.


The author is not aware of any German case identical to that of Grokster. However, the Higher Regional Court of Hamburg[11] granted an injunction against the distribution of file sharing software developed to enable a live television feed from subscription television to other computer users who had the file sharing software. The Court ruled that software providers had a responsibility to  provide suitable preventative measures which favour copyright owners. The Court also ruled that the owner of the copyright has to take reasonable measures to protect the copyrighted material (in this case a particular signal sent with the broadcast).


Allegedly there are more than 20,000 criminal proceedings regarding illegal downloading of copyrighted materials pending in Germany.




Copyright in Ireland is infringed where a person ‘without licence of the copyright owner undertakes, or authorises another to undertake, any of the acts restricted by copyright’[12].


There is, unfortunately, no statutory definition of the term ‘authorise’. Thus, an Irish court will most likely look to the UK for guidance. Given the similarities between the respective legal systems, judgments of the UK courts are of persuasive value (although not binding) in Ireland. Authorisation is a separate act of infringement from the act which is itself authorised.


In addition to primary infringement, the CRRA 2000 provides for secondary liability for infringement of copyright. Secondary liability falls on those who deal with an infringing copy,[13] provide the means for making infringing copies,[14] provide premises[15] or provide apparatus[16] for infringing performances. Like the UK, secondary liability will most likely not arise in relation to anyone providing the means for making infringing copies unless the article was specifically designed (or adapted) for making infringing copies. Therefore, articles generally designed for making copies will not contravene s 46 of the CRRA 2000.


The transfer of a music file by computer users may be difficult to counteract because of the difficulty of discovering the identity of the individual users.  Accordingly, the first step for any record company is to gain the co-operation of the ISPs who will be able to disclose the IP address of the individual.  However, contractual restrictions and privacy concerns, specifically data protection legislation, restricts the ability of ISPs to disclose personal data other than by way of a court order.  The Irish High Court has indicated the procedures and safeguards that are to be observed when a record company seeks disclosure of this kind of information.[17]  Clear proof of wrongdoing is necessary and, although privacy considerations are important, the High Court has ruled that privacy must give way to intellectual property interests where the activities of others threaten to erode these rights.


There is no case law identical to that of Grokster. However, if a similar case were to appear before an Irish court, it is most likely (given the similarities between the legal systems) that the courts will look to case law from the UK and Australia for guidance.




There has been no equivalent case to Grokster in Italy. It should be noted that, as in France, much of the evidence in Grokster would not have been available in an Italian case as the ‘discovery’ procedure does not exist in Italy. Also, only ‘uploading’ is punishable under Italian law; it is a criminal offence.


It is unpredictable what the outcome would be in a similar case in Italy. To be liable for the sale of software allowing peer-to-peer copyright infringement, a software provider must be responsible for a material contribution in the performance of the criminal offence under Article 171 ter (2)(a). Only fraudulent conduct is punishable.


From the above, it is evident that the legal landscape in Italy is unclear.




New Spanish Intellectual Property Law (Ley de Propiedad Intelectual) was approved in the Congress of Deputies on 22 June 2006. Under the new law, unauthorised peer-to-peer file sharing is unlawful and thus the private copy exception is not valid in peer-to-peer scenarios.  Those caught trading copyright files will be subject to a civil charge, even if the content is downloaded for personal use. The law also provides for a criminal action against ISPs who facilitate unauthorised downloading.


The position regarding contributory liability in a Grokster-type scenario is however unclear.  Spanish law does not have the concept of secondary liability. There is however, a general liability rule in the Spanish Civil Code which imposes liability for the acts or omissions of a party which through their fault or negligence causes harm.[18] A software provider who distributes software with the intention of promoting copyright infringement could therefore possibly be liable under this rule. It would be necessary, as with any tort-based rule, to show that the software distributors have caused harm to the copyright owner (ie directly participated in the copyright infringement).


However, under Spanish law, where a special (topic-specific) law exists, this will prevail over general law and render it inapplicable. Thus it is arguable that, in order to find the distributors of file sharing software liable for their actions, this would have to be done under the provisions of Spanish copyright law. Without any provision for secondary liability, it is quite possible that the software providers will not be found liable for the distribution of their products unless it can be shown that they are direct infringers themselves. Just as in the UK, those who provide the means of infringement are not considered direct infringers. Therefore, asserting liability of the software providers and distributors would involve proving that the acts of the software producers are part of and entwined in the act of infringement by the end-users of the software. This may be difficult to prove, unless, as in Grokster, there is evidence of express intention to entice users of the software to use the software for illegal purposes. Criminal proceedings may also be instituted against the software provider and users if criminal intent is established as well as a contribution to the infringing activities.




The focus of litigation has, since 2003, moved away from the providers of peer-to-peer services to the individual users of the service. This is as a result of the Supreme Court decision in Vereniging Buma & Stichting Stemra v KaZaA BV.[19] The Supreme Court found that the distribution of the Kazaa file sharing software was not an infringement of the rights of copyright holders. The case however was decided and rested heavily on the

construction of the claims made by Buma/Stemra in the case. The judgment was delivered without deciding any copyright issues. Accordingly, the possibility for a more Grokster-style approach cannot be excluded. However, for the moment, it appears that peer-to-peer service providers are not committing copyright infringement.[20]




Copyright infringement in the UK arises when a person ‘without the licence of the copyright owner does or authorises another to do, any of the acts restricted by the copyright’.[21]


The main English decision is the House of Lords decision in CBS Songs Ltd. v Amstrad Consumer Electronics Plc.[22] In that case, the term ‘authorise’ was considered but in the context of the Copyright Act 1956.  The House of Lords held that Amstrad did not sanction, approve or countenance an infringing use and that ‘authorise’ for the purposes of the Copyright Act meant ‘grant or purported grant, which may be express or implied, of the right to do the act complained of’. Although Amstrad conferred on the purchaser the power to copy, it did not grant or purport to grant the right to copy. The manufacture of a recording device merely facilitates copying. It is the purchaser who determines whether or not they chose to infringe copyright.  Also, to make a defendant liable as a joint infringer, inducement or persuasion to infringe must be by a defendant to an individual infringer and must identifiably procure a particular infringement.


In addition to the necessary authority needed to impose liability on a third party for copyright infringement, the lack of control on the part of Amstrad over its consumers was an important factor in finding against joint infringement by Amstrad. Amstrad had no control over its consumers or indeed any continuing interest once the technology was sold.


The High Court has recently confirmed that mere distribution of a product that can be used for infringing purposes is not authorisation under UK copyright legislation.[23]


From the above, it appears that the inducement theory promulgated by the US Supreme Court in Grokster will have a narrower application in the UK.  The inducement must be by way of advertisement and give rise to a specific infringement as a result of the

communication to an individual infringer.  Whether the UK courts will move in the direction of a ‘general inducement’ is an open question.


However, the supply of the equipment that is used by another to infringe copyright may amount to secondary infringement in the UK under s 24 of the Copyright, Designs and Patents Act 1988 which provides:


Copyright in a work is infringed by a person who, without the licence of the copyright owner –


(a)              makes,

(b)              imports into the United Kingdom,

(c)              possesses in a course of a business, or

(d)              sells or lets for hire, or offers or exposes for sale or hire,


an article specifically designed or adapted for making copies of that work, knowing or having reason to believe that it is to be used to make infringing copies.’


The general view is that this section does not apply to general purpose copying devices.  Therefore, devices such as photocopiers or tape-recorders will not fall within the section.  Rather the provision is directed to dealings in articles such as photographic negatives, moulds and the like which may be used to make copies of specific works.  This general view applies in relation to the criminal provision provided under s 107.




This article would not be complete without examining the position adopted by the Australian courts on the issue of file sharing.


The leading authority on the matter of authorisation in Australian law is the decision of the Australian High Court in Moorhouse v University of New South Wales,[24] which has been cited heavily in subsequent Australian cases, including the decision of the Federal Court of Appeal on the issue of peer-to-peer software distribution.[25]


The doctrine of authorisation for infringement of copyright is codified in the Australian Copyright Statute – the Copyright Act 1968. The Australian Copyright Act was amended by the Copyright Amendment (Digital Agenda) Act 2000 which means that Australian copyright law, unlike Irish or English law, now outlines matters to be considered when determining whether authorisation of direct copyright infringement has occurred.[26] The issues for consideration laid down by the Australian Act are threefold, namely the extent of any power held by the alleged authoriser over the infringing acts; the nature of any relationship existing between the alleged authoriser and the direct infringer; and whether any reasonable steps were taken by the alleged authoriser to prevent or avoid the occurrence of the infringing act.


These recent authorisation provisions had not previously been judicially considered before the decision of the Federal Court of Appeal in Universal Music Australia Pty Ltd v Sharman License Holdings Ltd & Ors. Sharman confirmed that the factors enumerated in the Australian Copyright Act are not an exhaustive list of what should be considered by the court when deliberating whether authorisation of infringement has occurred. In that case, the Court found Sharman liable for the authorisation of copyright infringement on the basis of its encouragement by advertising and its lack of sufficient measures to prevent or thwart the use of the Kazaa system for direct copyright infringement.


A settlement was reached between Sharman and the group of record companies involved.[27] Sharman has agreed to pay almost $115 million (£61 million) and also implement new filtering technologies to block out illegal content. It also pledged to negotiate licensing arrangements with record labels. The settlement marks the dawn of a new age of co-operation between peer-to-peer operators and rights holders.


ISP Liability


This article has dealt solely with the liability of the providers and distributors of peer-to-peer technology. However, for completeness, it is necessary briefly to mention the potential liability of ISPs involved in the file sharing arena.


In Europe, Directive 2000/31/EC[28] (which most EU Member States have implemented into their respective national laws) gives a number of defences to ISPs. Firstly, an ISP will not be liable for information transmitted through the use of its service where the ISP does not initiate the transmission, does not select the receiver of the transmission and does not expressly modify the information of the transmission.[29]  Secondly, an ISP will

not be liable for storing information, performed for the sole purpose of making more efficient the information’s onward transmission to other users of its service, provided the ISP does not modify the information, and acts speedily to remove or disable access to the information on obtaining actual knowledge of its removal from the network or that access to it has been disabled.[30] Thirdly, an ISP will not be liable for storing information provided it has no actual knowledge of illegal activity and, upon obtaining such knowledge, the ISP will avoid liability where it expeditiously removes or disables access to the information in question.[31]  There are examples of case law (and legislation) in the US[32] and Europe[33] where the liability of ISPs was decided by reference to its conduct in relation to the infringement.


Implications for Peer-to-peer Operations


Notwithstanding the differences in the copyright systems of Australia and the US, the courts in both countries have found that distributors of file sharing software are liable if they do more than just provide the facilities used by others to engage in infringement. In Grokster and Sharman, the defendants actively encouraged infringement by their advertising and benefited financially from the activities. They also failed to adopt available technological measures to prevent infringement when they became aware that their products were being used for infringing purposes.


It is premature to conclude that a global consensus is emerging on this issue, particularly as the National Courts in most European Countries have not been given the opportunity to consider the issue (even those that have, namely the Netherlands, have found the service provider was not liable for the infringing conduct of its users).


The innovation of new technology and methods of sharing files is fast outpacing the law.  Efforts by legislators in both the US and Europe to combat the infringement of copyright by amending legislation has proved problematic.  For example, in the US the proposed American Inducing Infringement of Copyrights Act[34] has been abandoned and in Europe a proposed draft Directive aimed at enforcing intellectual property rights through criminal measures is meeting stiff opposition.




Protecting the rights of intellectual property owners is only proper.  Yet, it is proving difficult for the legislators and courts) alike to balance these rights with the fostering of new innovation.


What is the way ahead for service providers and the developers of new products and services that are potentially capable of infringing uses? The global legal landscape is uncertain. However, it is clear from Grokster and Sharman that marketing is a key area to observe when promoting new/existing products/services. It is important to ensure that the products/services are not advertised or solicited in ways that are suggestive of infringing use. Also, it is best to beware of any resemblance that the products/services have to other infringing products/services. Furthermore, companies should also be conscious that, in countries where a ‘discovery’ process exists in litigation procedures, internal documents relevant to the issue in dispute will be disclosed.


Providers should seriously consider the legal (and financial) consequences of failing to effectively filter infringing files on peer-to-peer systems through the use of existing anti-piracy technologies.  For years, providers of file sharing software relied on arguments that there was no ability to control infringement through the use of filters.  However, it may now be difficult to succeed with such an argument unless the provider can explain why it could not take the same steps that Sharman took as part of the Australian settlement to exert control over its system through the use of filters.


As for the rights holders, while they can continue to pursue certain service providers and developers as well as end-users, the only effective way to combat Internet-based infringement is to develop new business models that are more attractive to users than Sharman or Grokster. Until then, the stage is set for future global cases in which the law will continue to strive to strike a balance between innovation and intellectual property protection.



Maureen Daly is the Head of IP & IT at Beauchamps Solicitors, Dublin, Ireland

Email: This article has been adapted, including updating, from a paper that was presented at the Annual Meeting of the International Bar Association in Chicago on 19th September 2006.

[1] According to the record industry in the UK over 2,300 people have already paid the price for illegally file-sharing copyrighted material, with average legal settlements of €2,420 ( (last visited 24 January 2007). In Ireland, IRMA (“Irish Recorded Music Association”) have settled cases with 52 file sharers (IRMA October 2006) ( (last visited 24 January 2007). On 17 October 2006, the IFPI announced over 8,000 new legal actions brought in 17 countries against file-sharing, including countries such as Brazil, Mexico and Poland hwich have not experienced such action before (see 

[2] 464 US 417 (1984)

[3] 239 F 3d 1004 (9th Cir 2001)

[4] In Re Aimster Copyright Litigation 334 F.3d 634 (7th Cir. 2003)

[5] 5445 US, 125 S.Ct 2764 (2005)

[6] See (last visited 24 January 2007).

[7] Arista Records LLC; Atlantic Recording Corporation; BHG Music; Capitol Records, Inc; Elecktra Entertainment Group Inc; Interscope Records; Laface Records LLC; Motown Record Company L.P; Priority Records LLC; Sony BMG Music Entertainment; UMG Recordings, Inc; Virgin Records America, Inc; and Warner Bros. Records Inc. v Lime Wire LLC; Lime Group LLC; Mark Gorton; and Greg Bildson 06 Civ-5936 District Court Southern District of New York 4th August 2006

[8] Société Civile des Producteurs Phonographiques v Anthony G  31ème chambre/2, le 8 Décembre 2005

[9] Code de la Propriété Intellectuelle (Intellectual Property Code) L122-5. The private copy exception does not extend to works of art, computer programs or databases.

[10] Droit D’Auter et les Droits Voisins dans la Société de L’information (le project de loi n˚1206) translated as the law on authors’ rights and related rights in the information society

[11]Cybersky” OLG, Urt.v.08.02.2006, Az:5 U 78/05

[12] Section 37(2) of the Copyright and Related Rights Act 2000 (“CRRA 2000”)

[13] Section 45 of the CRRA 2000

[14] Section 46 of the CRRA 2000

[15] Section 47 of the CRRA 2000

[16] Section 48 of the CRRA 2000

[17] EMI Records (Ireland) Limited v Eircom Limited [2005] EIHC 233

[18] Article 1902 of the Civil Code

[19]  Supreme Court, AN 7235 Case No. C02/186HR

[20] It was reported on 19th June 2006 that Dutch Court of Appeal found in favour of anti-piracy organisation, BREIN and ordered Techno Design to stop offering deep links to infringing mp3 files through its website The Court held that the searchable directory of links and other facilities (such as information on the quality of files) assisted illegal downloading. Techno Design was held liable for the damage it caused. It was aware that its search service referred systematically to infringing files and that it benefited commercially from this.

[21] Section 16(2) of the Copyright, Designs and Patents Act 1988

[22] [1988] AC 1013

[23] Philips Domestic Appliances & Personal Care BV v Salton Europe Ltd, Salton Hong Kong Limited and Electrical & Electronics Limited [2004] EWHC 2092 (CH)

[24] [1976] RPC 151

[25] Universal Music Australia Pty Ltd v Sharman License Holdings Ltd & Ors [2004] FCA 1242

[26] Section 101(1A) of the Copyright Act 1968 (as amended)

[27] Managing Intellectual Property – “Kazaa goes legal after $115 million payout” (last visited 29th August 2006)

[28] E.C. Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (“E-commerce Directive”)

[29] Article 12 of the E-commerce Directive (“Mere Conduit Defence”)

[30] Article 13 of the E-commerce Directive (“Caching Defence”)

[31] Article 14 of the E-commerce Directive (“Hosting Defence”)

[32]  See Religious Techology Center v Netcom 907 F. Supp. 1361 (N.D. Cal 1995).  Also, the Digital Millennium Copyright Act prevents imposition of liability if ISPs assist copyright holders in stopping the infringement

[33] See Godfrey v Demon Internet Ltd [2001] QB 201 (UK); Hit Bit Software GmbH v AOL Bertelsmann Online GmbH & Co Kg [2002] E.C.C. 15 (Germany);  SABAM v Tiscali Brussels Court of First Instance, Case., 26th November 2004 (Belgium); Scientology, Court of the Hague, 9th June 1999, [1999] Informatierecht/AMI 110 (the Netherlands)

[34]  “controversial copyright bill dies in senate” Reported 8 October 2004 (last visited 29th August 2006)