7.17 P2P cases: KaZaA in the Dutch Supreme Court
The Supreme Court in the Netherlands was the first national high court to consider the question of whether providers of P2P technologies were breaking the law. The Dutch music rights society Burna/Sternra had taken out the case against the original creators and distributers of the then KaZaA BV (now just ‘Kazaa’) software, Niklas Zennstrbm and Janus Friis.
Having lost in the Court of First Instance, Zennstrbm and Friis sold KaZaA BV to Sharman networks in Australia. Ironically, about a month later, in March 2003, the Amsterdam Appeal Court overturned the original decision.
Burna/Sternra appealed to the Dutch Supreme Court, which made its ruling on 19 December 2003. The Supreme Court agreed with the Amsterdam Court of Appeal that it was legal to make P2P file-sharing software available. The decision did not deal with the question of copyright infringement by individual file sharers so left open the possibility of suing individuals, as the IFPI (International Federation of the Phonographic Industry) have done in Denmark, Germany, Italy and many other countries.
The music industry in Australia sued the current owners of Kazaa, Sharman Networks. The trial was in November 2004, and Judge Wilcox ruled against Sharman in September 2005. There were further appeals and negotiations, and the parties eventually settled out of court in July 2006.
Although the Dutch Supreme Court was the first to consider P2P technologies directly, it has been widely argued that the US and Canadian Supreme Courts have also effectively laid down clear precedents that cover P2P technologies. The Sony v Universal case decided by the US Supreme Court in 1984 ruled that any technology with ‘substantial non-infringing uses’ could not be considered illegal.
More recently, in March 2004, the Canadian Supreme Court decided, in Law Society of Upper Canada v CCH, that that ‘a person does not authorise copyright infringement by authorising the mere use of equipment (such as photocopiers) that could be used to infringe copyright. In fact, courts should presume that a person who authorises an activity does so only so far as it is in accordance with the law.’ Also, ‘even if there were evidence of the photocopiers 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.’ Extending this to P2P software, the question becomes whether the P2P company can control the behaviour of users of its software.
When Grokster got to the US Supreme Court in 2005, the issue of 'substantial non-infringing' uses was side-stepped and the ruling on 27 June 2005 went against the P2P company.