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Los Angeles Times
April 1, 2004 Thursday
Home Edition
SECTION: BUSINESS; Business Desk; Part C; Pg. 1

LENGTH: 657 words

HEADLINE: File Sharing Ruled Legal in Canada

BYLINE: Jon Healey, Times Staff Writer

BODY:


Widening a cross-border split over Internet piracy, a Canadian judge ruled Wednesday that sharing music online was legal while U.S. lawmakers moved to turn some file sharers into federal criminals.

Judge Konrad von Finckenstein's legal blessing was an unexpected setback to the music industry's expanding international effort to stop free and unauthorized downloads. But experts said the judge's ruling hinged on elements of Canadian law not found in many other countries, including the United States.

In fact, lawmakers and prosecutors in Washington headed in the opposite direction.

A House Judiciary subcommittee approved by voice vote a bill that would make it easier to bring criminal charges against file sharers. And Atty. Gen. John Ashcroft announced the creation of a task force to strengthen the Justice Department's efforts to battle music, movie, video game and software piracy.

The bill, HR 4077, drew brickbats from file-sharing advocates, who said that a new study undermined entertainment industry claims about the evils of downloading. The study, conducted by two economists at Harvard University and the University of North Carolina, found no meaningful relationship between the rise in file sharing and the years-long slump in CD sales.

The bill by Reps. Lamar S. Smith (R-Texas) and Howard L. Berman (D-North Hollywood) would lower the threshold for criminal copyright infringement, making it a federal crime to knowingly offer 1,000 or more copyrighted works through the Internet.

By contrast, Von Finckenstein rejected efforts by record firms to force a group of Internet service providers to identify 29 customers in Canada who each allegedly offered more than 1,000 songs through file-sharing networks. In addition to ruling that the music firms failed to provide enough evidence of wrongdoing, the judge held that downloading songs for personal use and offering them to others online were legal under Canadian law.

The Canadian Recording Industry Assn. said it expected to appeal. "In our view, the copyright law in Canada does not allow people to put hundreds or thousands of music files on the Internet for copying, transmission and distribution to millions of strangers," said CRIA General Counsel Richard Pfohl.

Michael Geist, a University of Ottawa professor who specializes in Internet law, said Von Finckenstein's ruling could eliminate the music industry's ability to sue individual Canadians. File sharers in other countries may not find similar protection, he said, noting that Canadian copyright law carves out an exemption for copying music for private use.

The major music companies are suing or planning to sue file sharers in at least six countries, with most of the litigation so far taking place in the United States. Members of the Recording Industry Assn. of America have filed suit against nearly 2,000 alleged pirates, and several hundred have agreed to settle the claims by paying the RIAA a few thousand dollars each.

The Smith-Berman bill intends to up the ante by encouraging federal prosecutors to enter the fray. In addition to making it easier to prove criminal copyright violations against people who offer a large number of copyrighted files online, the bill would target those who record a movie in a theater or offer one or more copyrighted works before their commercial release. For first offenders, the maximum penalty would be three years in federal prison.

Adam Eisgrau, executive director of the file-sharing trade group P2P United, said a better approach would be for Congress to press music and movie companies to cut deals with file-sharing companies to distribute their works for a fee.

Berman responded that "no one is thinking that criminalization is the only way to deal with" online piracy. But as entertainment companies start to work with online distributors, he said, Congress needs to "hold out the potential for criminal prosecution to deal with the flagrant, egregious infringers."

LOAD-DATE: April 1, 2004