So 1999: music companies sue Spanish p2p firm

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Promusicae, the Spanish trade association for the major record companies (e.g., the Madrid version of the RIAA), filed suit in Spain this week against p2p developer Pablo Soto, creator of the Blubster, Piolet and Manolito music file-sharing networks. Soto’s networks represented the second generation of p2p, which eliminated the central controls that got the original Napster into legal trouble. He later added a layer of anonymity to sharing, making it harder to identify those who were swapping songs illegally. I can’t read Spanish, so I can’t even pretend to analyze the legal claims made by the labels. But their press release accuses Soto of developing software with the intent of profiting parasitically from other people’s works. It also argues the the networks were created specifically to share songs online:

In addition, it notes that Soto’s networks ‘all lack any kind of filter to avoid the exchange of files protected by authors, producers and performers’ intellectual property rights.’ Those allegations wouldn’t take the case very far in the U.S. For starters, it’s legal to share songs online if the copyright owners grant permission to do so -- not something the major labels have done, admittedly, but some independent labels and artists have. And it’s not necessarily illegal to facilitate unauthorized sharing, particularly if the technology has a legitimate use and its creator can’t monitor or control what people do with it. Nor is there any obligation to use filters to block infringements, at least not yet.

In an interview, Soto said, ‘What they claim is that we are competing with them and we are breaching their IP [intellectual property].’ But he insisted that unlike Napster, his programs give him no way to watch what users do. He also noted that numerous independent musicians use Blubster to distribute their songs. ‘Many of those musicians need to use p2p software because they can’t get distribution deals’ from the major labels, he said.

The case raises the same set of issues that the RIAA and MPAA litigated here against Grokster and StreamCast (distributor of the Morpheus software), and both here and in Australia against the companies behind the Kazaa software. The labels won those cases with the help of internal company records and testimony showing that the companies planned to encourage and capitalize on piracy. The Supreme Court’s ruling in the Grokster case doesn’t apply to Spain, though, so the courts there will be following a different legal roadmap.

The lawsuit seemed a little odd, given that Soto’s networks are small potatoes compared to BitTorrent and other third-generation p2p applications. Soto suggested that the labels were running out of options for deterring piracy in Spain. The record companies’ efforts to identify individual infringers on p2p networks have been blocked by the courts, as have their claims against sites to bootlegged songs.

UPDATE: I got a bit more insight into the complaint from Beatriz Sanchez-Eguibar, director of legal services for Promusicae. Although there’s no concept of ‘contributory infringement’ in Spanish law, she said, the complaint against Soto accuses him of infringing copyrights by making software available to people who used it to make unauthorized copies of songs. It also accuses him of unfair competition because his profits came at the expense of the labels’ works. Soto has about three weeks to reply to the complaint, and hearings on the case could be wrapped up within a year. As for the links sites, Sanchez-Eguibar said that some had been temporarily sidelined, but the cases had yet to be decided. And in regard to lawsuits against individual infringers, she said Spanish law recently was changed to make it easier for Promusicae to force ISPs to disclose the identities of customers whose accounts may have been used for piracy. ‘A new door has opened,’ Sanchez-Eguibar said, although the labels have yet to walk through it.

In response to John Mitchell’s request (see his comment below), I asked Sanchez-Eguibar to send me a copy of the complaint, but she said it was confidential. So all I can offer on that front is jpegs of five pages supplied by Soto’s publicist. I have no reason to doubt their authenticity, but I can’t vouch for how complete they are. Here you go (click on the images to get a full-size view):