Movie and record producers alike are saying file-sharing networks that permit its users the ability to make copies from other network member’s computers are infringing on the copyright laws and costing billions of dollars in lost revenue.

The recording industry claims to have lost 25% of it’s revenues since computer, so called thieves, have been using peer-to-peer file-sharing networks to obtain free music downloads.

The two latest file-sharing companies to be targeted by these copyright lawsuits are Grokster Ltd, known for its Grokster file-sharing software and StreamCast Networks Inc. from which the Morpheus free music downloading software is distributed.

Unlike Napster, Grokster and Morpheus put a spin on the popular file-sharing phenomenon. Instead of indexing the shared files like Napster did, these file-sharing products enables it’s network members to build their own indexes – thus allowing others within the network to download free music and movie files.

While some musicians are protesting they are being cheated by these illegal free music downloads – others are speaking out backing how music, movies, pictures and copy are being shared over the Internet.

Some music lovers actually use the file-sharing networks to check out an artists latest release before paying up to $18 for a CD that may only have one good song on it. You still will have those that will never make a purchase and continue to take advantage of the free music download networks.

Many file-sharing network users have said that using these networks is good for the music industry. File-sharing can bring listeners to smaller, independent bands that they may not otherwise hear on radio or in the mainstream.

With the likes of Apple’s iTunes store many have turned their backs on file-sharing networks paying 99 cents per song – Apple claims to sell more than 1 millions songs everyday. Although iTunes is limited still, thus giving file sharing networks a void to fill the unlimited access to music and movies that may otherwise not be able from iTunes.

In late 2003 record companies started suing individuals that were downloading free music. With file-sharing networks like Grokster and Morpheus it will be much harder for the recording industry to track down files that are uploaded by individual users.

With the Supreme Court now involved they are expected to make some type of ruling in June 2005 on what if any action should be taken against the makers of file-sharing network software.

The wrong decision could discourage the future development of products like the iPod or other file-sharing software programs that could be used for legal purposes.

Since Grokster and Morpheus do not monitor or have any knowledge of who or what is being downloaded, a federal judge in Los Angeles and the U.S. 9th Circuit Court of Appeals rejected the copyright infringement charges against both these file-sharing networks.

Based on the 1984 ruling of the Supreme Court that stated the use of Sony Betamax, which allowed users to make copies at home of copyrighted TV programs, was legal.

The recording industries angle last week was that the approach companies like Grokster and Morpheus are making by advertising their software will provide access to free copies of copyrighted materials should allow them to be sued and shut down.

While the jury may be out on this one for sometime – file sharing networks and free music downloads will continue with most users not really worrying about getting sued, since most do not download free music in excess of a few files per month.

Copyright 2005 - Tim Somers, 3G Enterprises, LLC