Grouper: Web site 'legitimate'

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In a legal response to last month's lawsuit filed by Universal Music Group, Grouper Networks has argued that its Web site is a service provider of the sort shielded from litigation by the Digital Millennium Copyright Act.

"Grouper is a legitimate Internet service provider and a leading innovator in the user-generated video market," Grouper said. "Grouper is not a site that induces, promotes, encourages or facilitates piracy and thus is quite different from the defendants in the Napster, Aimster and Grokster cases to which UMG attempts to compare Grouper."

UMG is suing Grouper and another file-sharing site, Bolt.com, in U.S. District Court in Los Angeles, seeking injunctive relief and legal damages potentially running into the tens of millions of dollars. Observers have suggested that the sites will have a hard time succeeding where peer-to-peer dot-coms such as Napster, Aimster and Grokster have failed.

Each of those similarly sought "safe harbor" in protection under the DMCA.

Grouper, represented by attorneys from the Santa Monica law firm of Greenberg Traurig, also said it is "in the process of implementing a cutting-edge filtering system to protect against users' violation of copyrights." And it cites a company policy of complying with "copyright owners' requests to remove copyrighted materials that users may improperly upload."

Asked for comment on the Grouper filing, UMG said: "Grouper, like Bolt and MySpace, has a central server which collects and stores the infringing content. They reformat it, distribute it and encourage and facilitate its widespread use for downloading and trading. The purpose of all this is to build a successful business, a business taking an active role in copyright infringement. They clearly are not the kind of passive conduit that the DMCA protects.

"Universal is committed to protecting the rights of our artists and songwriters and supports innovation," the statement continued. "But this is not about innovation. It is about a business that seeks to trade off on our content, and the hard work of our artists and songwriters, without permission and without fairly compensating them. We are confident that we will prevail in court."

Sony Pictures Entertainment agreed to acquire Grouper Network in August. The studio hasn't been named as a defendant, but the suit reserves "the right to add SPE as a defendant once the nature and full extent of SPE's relationship with Grouper.com is known."

No hearing date has been set yet on the suit.
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