Will morpheus meet its maker?

In a case expected to reverberate loudly through the technology and entertainment industries, Woodland Hills-based Streamcast Networks Inc and fellow file-sharing network Grokster, defended their very existence before the Supreme Court on March 29.

Sued by 28 entertainment companies, including oligarchs Metro-Goldwyn--Mayer Inc., Walt Disney Co. and Time Warner Inc., the controversial file-swapping firms did their best to dissuade the skeptical judges of their guilt. Most analysts, including University of Richmond Law School professor James Gibson, expect the court to try to find a happy medium between protecting copyright infringements while still allowing for tech innovation.

"I think that the court is conflicted. On the one hand, I don't think it liked these defendants very much. They seemed to search for a way to give the plaintiffs a shot to hold Streamcast and Grokster liable, but it struggled to articulate a standard to make that happen. They can't make it too broad to impede technological innovation by more innocent folks," Gibson said.

"The court may well try to come up with some new theory of liability that depends more on the behavior of the company than on the particular technology."

The case had been kicking around lower courts for the previous two years before the Supreme Court decided to handle it. In April 2003, a U.S. District Court in Los Angeles ruled that Grokster and StreamCast were not responsible for use of their software for copyright violations. The court cited the landmark Betamax case of 1984, where the court ruled in favor of VCR technology. The studios appealed the decision. In August 2004, the Ninth Circuit Court of Appeals in San Francisco agreed with the Los Angeles court's conclusion.

Gibson gave StreamCast's attorney's high marks for their difficult day in court.

"StreamCast did a very good job. Their attorney was put in a difficult position. He fought intelligently even though he detected the discomfort that the court had," Gibson said.