Movie Studios Target Peer-to-Peer Networks with Suit

Undaunted by the failure of the recording industry to convince courts to hold peer-to-peer networks responsible for piracy, the movie industry is taking its own legal action against server operators they say have enabled “hundreds of millions” of copyrighted files to be shared illegally.

The Motion Picture Association of America (MPAA) said it was filing a lawsuit against BitTorrent, the fastest-growing P2P network, in the United States, and would also work with international law enforcement agencies to target eDonkey and DirectConnect servers in the UK. All the suits seek to shut down the servers used to distribute files on the networks.

The strategy revisits attempts made by the Recording Industry Association of America (RIAA) to target the networks as a way of pinching online piracy of digital music.

Those efforts were thwarted when an appeals court found that the owners of those networks and the software they distribute could not be held liable for how consumers use them, even if they are guilty of violating copyrights.

Changing Landscape

However, a decision late last week by the U.S. Supreme Court to hear arguments next spring in a P2P case involving the MGM studio and Grokster could open the door for that ruling to be set aside.

The MPAA suits also take a slightly different approach, arguing not that the P2P networks are at fault, but that the operators of the servers are because they know what is stored on them.

“The operators of these servers exercise total control over which files are included on their servers and even determine if some kinds of files aren’t allowed,” John Malcolm, the MPAA’s senior vice president and director of Worldwide Anti-Piracy Operations, said.

Malcolm said some server operators won’t allow pornographic files, for instance, but have “no compunction allowing illegal files of copyrighted movies and TV shows to flow through their servers. We are moving to stop that. The message today is clear: if you illegally trade movies online, we can find you and we will hold you accountable.”

Familiar Refrain

The MPAA also unveiled partnerships with international law enforcement aimed at stopping piracy with criminal investigations. Agencies in France, the Netherlands and Finland are already pursuing such cases, the MPAA said.

“We cannot just sit back and let Internet pirates brazenly steal our movies and other intellectual property,” MPAA President Dan Glickman said. “The film industry believes digital delivery of entertainment holds great promise, if we can protect it from thieves long enough to give it a chance to grow.”

The MPAA says piracy costs the movie industry as much as US$3.5 billion a year worldwide. The vast majority of those losses still come from illegally copied DVDs or unauthorized recordings of copyrighted films.

Online movie piracy is still a relatively small problem, in part because the bandwidth and computer power needed to effectively store, distribute, download and playback digital copies of movies is not widely in place. In fact, one appeal of BitTorrent, which analysts say is the fastest-growing P2P site, is the way it points users to files, with some films broken up into smaller files that can be more easily downloaded.

Yankee Group analyst Mike Goodman said the entertainment industry has largely chosen after-the-fact legal action over proactive technological developments that would enable it to capitalize on the uptake of disruptive technology such as the Internet in general and file-sharing in particular.

Rigorous Pursuit

“They’re finally starting to come around to the point of view that they should spend as much on developing their own technology,” Goodman said. “But they started off well behind.”

The Yankee Group estimates that only about 4 percent of the 70 million Web-connected U.S. households have downloaded movies at least once, compared to more than 20 percent that have accessed music files that way.

However, the MPAA has left little doubt that it intends to be every bit as vigorous as the RIAA in pursuing legal avenues.

Glickman said while digital distribution could bring about another “golden age” for Hollywood, it could also be the movie industry’s demise. “The Internet is poised to unleash a wave of intellectual piracy that will undermine the very foundations of moviemaking,” he said.

The MPAA has followed the footsteps on the RIAA on other fronts. Last month, it filed its first batch of about 200 lawsuits against individuals it says shared pirated copies of movies on the Web. The RIAA has now sued more than 7,000 individuals.

Like the RIAA, the movie industry association also hopes that lawsuits can direct people who want to get movies online to legitimate paid sites such as MovieLink, CinemaNow and MovieBeam.