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The U.S. Supreme Court has agreed to hear a case pitting the recording and film industries and thousands of individual artists against online companies offering software often used to trade copyrighted material.

The U.S. Supreme Court has agreed to hear a case pitting the recording and film industries and thousands of individual artists against online companies offering software often used to trade copyrighted material.

Plaintiffs groups say that the companies, Grokster and Streamcast Networks, are no different from Napster and should be shut down.

Napster was once the leading destination for Internet users to trade songs, videos and software. A lawsuit filed by many of the same plaintiffs succeeded in showing that Napster was helping users to infringe on copyrights. Eventually, Napster was shut down.

But Grokster and Streamcast won the first two rounds of litigation in district court in San Francisco and before the 9th U.S. Circuit Court of Appeals. Differences in the technology used tilted the case in their favor.

The difference is that these companies operate a decentralized system matching users rather than controlling centralized servers. Those copying music and movies do not get it directly from the Web sites but are put in touch with other individuals willing to share.

Now, plaintiffs have asked the Court to reject the 9th Circuit decision, Metro-Goldwyn-Mayer v. Grokster, 380 F.3d 1154. The distinction in technology, they argue, does not inoculate defendants from the fact that their software allows users to regularly trade copyrighted information.

The defendants counter that the technology serves a valuable purpose and that the copyright holders should target individual infringers rather than attacking an entire system of exchange developed on the Internet.

The key difference between Grokster and Streamcast and their predecessor, Napster, is the technology. The panel of appellate judges at the 9th Circuit pointed out that Napster used a “centralized indexing” system holding a list of available files.

Grokster and Streamcast applied what the panel called a “decentralized index peer-to-peer file-sharing model.” Under this model, each user makes data available to others on the system through an individual computer.

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