In Amstrad, Lord Templeman stated that 'Whatever may be said about this proposition, Amstrad have no control over the use of their models once they are sold'. This is the distinguishing point between Amstrad and Moorhouse as the latter had control over their machinery and because they failed to take reasonable steps to prevent infringement were held liable. Moreover, in the case of Law Society36 a law Society library was not held liable for maintaining a photocopier. The law society posted a warning against infringement of copyright.
The reason that they were not held liable is because "even if there were evidence of the copiers having been used to infringe copyright, the Law Society lacks sufficient control over the Great Library's patrons to permit the conclusion that it sanctioned, approved or countenanced the infringement. " To continue, we will now focus on the latest technological advancement, the 'peer-to-peer file sharing,' which raised many issues as regards copyright infringements. 'File-sharing is a social phenomenon of the digital era.
'37 Mostly all types of works such as films, music and works of literature can be transmitted over the World Wide Web (WWW). Millions of users around the world can share, virtually all their files over the internet through particular software for free. "The law of copyright, however, protects the rights in these media of the original authors or owners, many of whom claim that file-sharing not only infringes their legal rights but also seriously harms their financial interests.
"38 "File sharing and illegal downloads of content have resulted in millions of dollars of losses for many companies and substantial lawsuits by trade groups and entertainment companies. "39 Peer-to-peer file-sharing (P2P) networks were pioneered by Napster. 40 This was a software application that enabled its users to exchange their music files through a very simple 'search and find' process. However, the Napster system did not actually copy the content of files to its own system but only the users made copies.
With the use of this technology each digital copy of the file suffered no loss of quality and this has caused a great problem to the recording industry, as CD burners (devices copying data such as music on a CD) are widely available. 41 The possible infringing actions by an individual involved in file-sharing are: copying audio/video from a CD/DVD to a computer hard disk, or vice versa and uploading or downloading a file. 42 The primary possible breach of UK/EU copyright law is infringement by copying under the CDPA 1988 s.
17. 43 Moreover, the 'Infosoc' directive provides that 'communication to the public' of a work, infringes the copyright in it. 44 Furthermore, defences such as 'innocence' and 'private use' which need not to be considered here are not applicable. There is the big question as to 'whom do you sue' in file-sharing cases. The actions in Napster and Grokster were not against the individuals who copied music, or allowed their music to be copied.
However, the recording and the film industries have recently waged a campaign of suing the individual file-sharers ('up-loaders' and 'down-loaders'). 45 The issue which arose in the cases of Napster and Grokster is as mentioned above for the previous cases; assuming that there has been infringement by an individual, is the person who provides the facilities for committing that infringement liable for secondary infringement? Napster was created in 1999 to aid college students trace music files which had been compressed using the MP3 format.
'It was a precursor to the peer-to-peer file sharing networks in use now. '46 (It was not exactly a P2P network) Napster uses a centralized server which acts as a search engine to assist its users to download music from the computer hard drives of other Napster users. 47 The actual form of a P2P network however does not use a centralised server, but purely a connection between users. 48 The central server did not store the files. The music files remained on the individual user's computers. The Napster software was provided for free to users to download. 49
Representatives of a number of recording studios took action against Napster in 2000 claiming that it was assisting and promoting users to infringe copyright. Napster relied in its defence on the Sony case. However, Sony Corp as seen above only had constructive knowledge about the VCR users making copies, whereas Napster was shown to have actual knowledge of infringements as well. 50 Following the Sony decision however, 'contributory' liability could not be proved if a manufacturer was only providing the means to commit an infringing activity and the Napster software was also capable of commercial non-infringing uses.
(Same as the use of VCRs) In considering the issue of 'vicarious' liability, the claimant had to show that the defendant had a supervisory role in the infringing activity and a direct financial interest in such activity. Both the District Court and Appeal Court (9th Circuit) found that Napster had a direct financial interest in such activity and that it also had some ability to 'police' files made available,(as it had a central server) thus a 'vicarious' liability could be shown.
'In July 2001, Napster was ordered by the Court to shut down all its servers. '51 Moreover, we will now consider the Grokster case. "It has proven more difficult to regulate other P2P systems with different network architecture that does not require a centralized server to process search requests and downloads, such that each user's computer acts as a search engine (such as the defendants; Grokster and Streamcast both using the FastTrack networking technology). "52
The 9th Circuit says that Grokster did not provide a facility for direct infringement and that there was no actual knowledge of infringement, as the defendant had no control over the index files available for sharing (unlike Napster because there was no central server) thus there was no 'contributory' infringement. 53 In considering 'vicarious' copyright infringement, Grokster did have a financial benefit as they received money from advertisements on their software.
However, as they did not have the ability to supervise the infringing conduct (no central server) 'vicarious' liability could not be proved. 54 However, the Supreme Court decided that the only way to enforce copyright holders' rights is to use the 'secondary' liability route. The Court found that the lower courts had erred in their broad interpretation of the Sony case that significant non-infringing uses of a product along with an absence of actual knowledge of any infringement would let off the software providers from secondary liability.
'It seems that the knowledge requirement has been replaced with intention. '55 In June 2005, the defendants surrendered and a judgement for 50 million dollars against them was given; the Supreme Court found evidence of Grokster's intention to facilitate the unlawful use of the software by advertising their software program to users using Napster compatible programs; promoting the software's ability to provide copyrighted music; aiding users in locating and playing copyrighted material, 'and marketing to possible advertisers the potential to capture former Napster users.
'56 Furthermore, in the case of Universal Music Australia Pty Ltd v Sharman License Holdings Ltd  FCA 1242, the Australian court followed the decision of the Supreme Court in Grokster. The defendants were held liable for copyright infringement because they had knowledge of the copyright infringing uses of the software (Kazaa) and they have not "implemented any technical measures" to prevent the infringement" other than the pornography filters. 57
Instead of examining the capacities of the technology created as in the Sony case, the courts now examine the economic impact of the technology. This is a major conceptual change in the jurisprudence. 58 "By opening up the question of loss as a criterion in judging copyright breach, the judiciary have made it possible to steer a middle path between zero tolerance and permissiveness if they choose to take command of the situation and map their own course.
"59 The advancements in technology and P2P file-sharing outpace the law. 60 The efforts by legislators in both the US and UK to deal with copyright infringement has proved problematic; in the US, the proposed American Inducing Infringement of Copyrights Act was abandoned and in the EU, a proposed draft Directive intending to enforce copyright rights through criminal measures is dealt with great antagonism. 'The global legal landscape is definitely uncertain. '61
It has been proven extremely difficult to balance the copyright owners' rights with the development of technological advancements and furthermore the introduction of the Internet and the digital era should not be considered as a way to infringe copyright. 62 Even though copyright law systems in the US and EU have responded to some degree to these complicated issues of copyright infringement on the internet, there are still several P2P file-sharing software which millions of users around the globe use daily.
It would be appropriate to say that copyright laws have 'gaps' which the companies take advantage of, in order to keep promoting their software without being held liable for infringement, as seen by the above cases. Software such as Limewire and Morpheus still rely on the 'vicarious' and 'contributory' infringement 'gaps' of not having control over the files disseminated by the users, provided that the companies do not promote infringing uses of the software.
These ongoing battles will most definitely continue, until and if a middle ground is reached by both the software providers and the copyright holders which claim that their rights are infringed. In the meantime, we will have to wait and see whether the courts or legislators introduce a ruling or legislation which would significantly reduce the numbers of copyright infringements, as the rulings in Napster and Grokster are a form of response, but did not really make any significant difference as to the protection of copyright rights on the internet.
However, it is impossible to eradicate copyright infringement over the internet as it is impossible to monitor and police the millions of its users. Moreover, the users do not realise that they may be infringing copyrights nor do they believe that they are 'criminally' liable in any way. Besides, how many of them would walk to the record store and buy a music CD of their favourite artist costing 15 pounds, when they can simply download it for free over the 'ancestors' of Napster.