updated 12/19/2003 3:21:27 PM ET 2003-12-19T20:21:27

A federal appeals court ruled Friday the recording industry can’t force Internet providers to identify subscribers swapping music online, dramatically setting back the industry’s anti-piracy campaign.

The three-judge panel from the U.S. Court of Appeals for the District of Columbia overturned a trial judge’s decision to enforce copyright subpoenas used by the recording industry. The subpoena power was established by a law passed before the explosive growth of swapping music online.

“It’s an incredible ruling, a blow for the little guy,” said Bob Barnes, a grandfather in Fresno, Calif., who was targeted by one of the earliest subpoenas from the Recording Industry Association of America but isn’t among the hundreds who have been sued so far.

The ruling does not make it legal to distribute copyrighted music over the Internet, but it removes one of the most effective tools used by the recording industry to track such activity and sue downloaders.

The appeals court said the 1998 copyright law doesn’t cover popular file-sharing networks used by tens of millions of Americans to download songs. The law “betrays no awareness whatsoever that Internet users might be able directly to exchange files containing copyrighted works,” the court wrote.

The appeals judges said they sympathized with the recording industry, noting “stakes are large.” But the judges said it was not the role of courts to rewrite the 1998 law, “no matter how damaging that development has been to the music industry or threatens being to the motion picture and software industries.”

Sen. Norm Coleman, who has criticized the use of such subpoenas, predicted that any efforts to broaden the 1998 law would “face some serious obstacles” in the Senate.
“We clearly have to do a better job of getting law and technology and ethics into better sync,” said Coleman, R-Minn.

Current lawsuits will still go forward
Legal experts said the appeals ruling probably will not affect the 382 civil lawsuits the recording industry already filed since it announced its campaign nearly six months ago. It also was not expected to affect financial settlements with at least 220 computer users who agreed to pay penalties from $2,500 to $7,500 each.

But it will make identifying defendants for future lawsuits much more difficult and expensive. The ruling forces the recording industry to file civil lawsuits against “John Doe” defendants, based on their Internet addresses, then work through the courts to learn their names.

Cary Sherman, president of the recording industry group, said 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.”

Sherman promised to “continue to defend our rights online on behalf of artists, songwriters and countless others involved in bringing music to the public.”

Earlier this week, the recording industry sent letters to the 50 largest U.S. Internet providers asking them to forward written warnings in the future to subscribers caught swapping music.
Details were still being worked out, but if Internet providers agree, subscribers who swap even modest collections of music online could receive the ominous warnings.

The letters demanding an end to the practice would be forwarded without revealing subscriber identities to music lawyers. The warnings would be mailed directly to Internet account holders — potentially alerting parents or grandparents about illegal downloading in their households they might not know about.

U.S. District Judge John D. Bates had approved use of the disputed subpoenas, forcing Verizon Communications Inc. to turn over names and addresses for at least four subscribers. Since then, Verizon has identified scores of its other subscribers under subpoena by the music industry, and some of them have been sued.

'Important victory for all Internet users'
Verizon’s lawyer, Sarah Deutsch, called the ruling “an important victory for all Internet users and all consumers.” She said the music industry should be required to file traditional civil lawsuits — which are more expensive and time-consuming — to prosecute downloaders.

“Consumers’ rights cannot be trampled upon in the quest to enforce your copyright,” Deutsch said.

The appeals court said one argument by the recording industry “borders upon the silly” — the trade group’s claim that Verizon was responsible for downloaded music because such data files traverse its network.

The Digital Millennium Copyright Act compels Internet providers to turn over the names of people suspected of operating pirate Web sites upon subpoena from any U.S. District Court clerk’s office.

Verizon had argued at its trial that Internet providers should only be compelled to respond to such subpoenas when pirated music is stored on computers that providers directly control, such as a Web site, rather than on a subscriber’s personal computer.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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