Grokster's illegal downloading service shuts down

[canadateck]

LOS ANGELES (AP) -- The popular Internet file sharing service Grokster Ltd. may be going the way of Napster.

In a surprise settlement with the recording and movie industry announced Monday, Grokster agreed to shut down its music and movie swapping software and pay $50 million in damages.

Grokster executives indicated they plan to launch a legal, fee-based "Grokster 3G" service before year's end under a new parent company, believed to be Mashboxx of Virginia Beach, Va.

"It is time for a new beginning," Grokster said in a statement issued from its corporate headquarters in the West Indies. On its Web site, Grokster said it "hopes to have a safe and legal service available soon."

Mashboxx, headed in part by former Grokster President Wayne Rosso, already has signed a licensing agreement with Sony BMG Music Entertainment.

The terms of the settlement ban Grokster from participating, directly or indirectly, in the theft of copyrighted files and requires the company to stop giving away its software.


Grokster lost an important Supreme Court ruling in June when justices ruled that the entertainment industry can file piracy lawsuits against technology companies caught encouraging customers to steal music and movies over the Internet.

The court decision, which gave the green light for the federal case to advance in Los Angeles, significantly weakened lawsuit protections for companies that had blamed illegal behavior on their customers rather than the technology that made such behavior possible.

Grokster's settlement does not affect other defendants in the case, including StreamCast Networks Inc., which distributes Morpheus, and Sharman Networks Ltd., which distributes Kazaa.

The movie and recording industry plaintiffs in the case are expected to file a motion for summary judgment by early next year against the remaining defendants, and U.S. District Judge Stephen Wilson has scheduled a hearing on the matter for March 27.

Attorneys for Streamcast and Sharman said they would continue to fight the lawsuit.

"We think this is going to a jury," said Sharman lawyer Charles Baker.

Grokster lawyer Michael Page said outside of court Monday he believed the company would have prevailed at trial but could not afford a protracted legal battle. It was unclear whether Grokster can afford to pay the $50 million in damages required under the agreement.

The head of the Recording Industry Association of America, Mitch Bainwol, described the settlement as "a chapter that ends on a high note for the recording industry, the tech community and music fans and consumers everywhere."

The entertainment industry's legal assault on file swapping scored its first big hit when Napster was forced in 2001 to abort its operations by a federal court. The company now charges users.

Grokster's decision was not expected to immediately affect the ability of people who already run the company's file-sharing software to download music and movies online, nor was it expected to affect users of rival downloading services, such as eDonkey, Kazaa, BitTorrent and others.

[ROF]

Excellent news for those who download music. Another service will be opening soon with pricing schemes that will begin to compete with others out there instead of allowing people to outright steal music. I wish the others would give up and either leave or switch to a pay model where everyone from the consumer and network operators to the owners of the intellectual property all benefit by this fantastic distribution model.

iTunes needs more competition so it's good to see another competitor in this expanding field.

[mbellot]

[quote="canadateck"]

Mashboxx, headed in part by former Grokster President Wayne Rosso, already has signed a licensing agreement with Sony BMG Music Entertainment.

Will the "new" Grokster include the Sony rootkit virus, or is that an optional download?

Grokster lost an important Supreme Court ruling in June when justices ruled that the entertainment industry can file piracy lawsuits against technology companies caught encouraging customers to steal music and movies over the Internet.

The court decision, which gave the green light for the federal case to advance in Los Angeles, significantly weakened lawsuit protections for companies that had blamed illegal behavior on their customers rather than the technology that made such behavior possible.

Interesting. I wonder how this affects ComCrap, et al and their advertising blitz that hypes the ability to download music and movies at extremely fast speeds... Of course they are reffering to totally legal downloads

[shelbyGT]

Rof... I think you might be a little mistaken here. The record companies already don't really like iTunes because they think they are selling it for too LOW at .99 cents.

Given, I do agree with the theory that more competition is better for the consumer. However, in this market where supply is tightly controlled at it's source by 4-5 large companies, I don't know that we will see it work out quite that way.

[lordsmurf]

ROF, those music stores online are a joke. You are far too limited in your ability to burn or transfer across devices. In other words, most of them are worthless.

[shelbyGT]

As long as any DRM let's you make 1 copy to CD, there is nothing stopping you from making a copy of that.... so really, in that aspect, DRM is a joke.

[somebodeez]

Mashboxx, headed in part by former Grokster President Wayne Rosso, already has signed a licensing agreement with Sony BMG Music Entertainment.

Well, in light of this piece of news:
https://www.videohelp.com/forum/viewtopic.php?t=283441

and for other reasons, I won't be a customer.

[gll99]

Without taking sides on the subject.................

Conspiracy theorists would write it this way:

The judicial system is easy to manipulate you just need the right strategy.

1) Secretly buy out the Grokster executive with guaranteed future deals and some easy cash up front
2) Sue Grokster (yourself really)
3) Put up a defence. Make it look good but weak enough to lose the case
4) This sets a precedent for any future rulings on the subject when they go after other companies

Easy as pie.