From P2P to BT, File-Sharing Software Upgrades with Lawsuits

By Harry Yang, China IP,[Internet & Domain]

    Network infringement is a legal issue, which has emerged with the birth of new technologies. Now let’s look back to the birth and growth of peer-to-peer technology or “P2P”. Simply put, P2P enables people to connect directly with other users’ computers and swap files, rather than have to connect with servers to browse or download.
     Before P2P emerged, File Transfer Protocol or “FTP” was generally used to share files on networks. Users connected their PCs with servers running FTP around the world, accessing and downloading a large amount of information and programs on the servers. However, FTP has a defect – it requires better computer hardware. Once the traffic is large with more users, it may easily lead to jams at the server end network. This is the reason why FTP was finally replaced by P2P.

First generation P2P: Napster, overthrowing tradition
     In 1998, an 18-year old school student, Shawn Fanning, developed a program named “Napster”. He might not have expected that the little program, which was intended to share MP3 songs among his friends, would overturn the traditional way of network sharing and foment a P2P revolution. 
     Napster is an application to swap music files between individuals on the internet. It connects to a central server, which is managed by Napster Inc. and sends out lists for audio files that are stored on users PCs of in the form of MP3. Through the common ownership by worldwide users, each user is able to search and download specific music files held by other users. The central server provides only a database for document retrieval and manages the users connections. Music data are transferred on the direct connection between users.
    After it began to operate, Napster Inc. achieved great success in just more than 10 months, with global registered users soon exceeding 50 million. By September 2000, the users had exchanged about 1.4 billion songs and around 1 million users were connected to Napster’s servers at any one time. In the United States, about 30 percent of PCs are installed with Napster’s music-sharing software. The market value of the company was estimated to be US$60 million to US$80 million by 2000.
     However, users employed the software and system of Napster in mostly uploading and downloading copyrighted music works in the form of MP3 files. Soon after Napster Inc. was established, 18 record companies, including A&M, sued Napster on account of vicarious copyright infringement, contributory copyright infringement and unfair competition. The investigation found that among MP3 works, which could be obtained using Napster’s software and system, around 87 percent, might be copyrighted. On August 10, 2000, upon the request of the plaintiff, the U.S. District Court for the    Northern District of California issued a preliminary injunction banning Napster’s users from using Napster’s software and system to upload or download copyrighted music works in MP3 format which were owned by the plaintiff. Unsatisfied with the judgment, Napster appealed to the U.S. Court of Appeals for the Ninth Circuit. On December 12, 2001, the court basically upheld the decision of the local court and required Napster to stop the infringing conduct, and to check and remove all infringing works from its search engine. 

Second generation P2P: decentralized Gnutella
 The concept of P2P gave inspiration to later developers. Napster was ultimately found guilty because it had a central server. The second generation P2P used the decentralization model. At the end of 1999, Justin Frankel of the United States released the second-generation P2P software – Gnutella. With lessons from Napster’s failure, Gnutella pushed the P2P concept even further: it did not have a central content server; once installed with the software, a user’s PC immediately turns into a server which provides complete content and file services and automatically searches similar servers, so as to make a super server network of numerous PCs. The later KaZaa and WinMX also adopted this technology.
    The second generation P2P still did not avoid litigation, as KaZaa was sued in the Netherlands and Australia in 2002 and 2004 respectively. On December 20, 2003, the Supreme Court of the Netherlands decided that the file-sharing website, KaZaa, should not be held liable for infringing users who used its free software in downloading music or movies. Despite this decision, KaZaa still reached a settlement agreement with four global music companies, including Universal Music, Sony BMG, EMI and Warner Music. According to the agreement,  KaZaawould compensate the four music companies a total of US$ 115 million. KaZaa also said that its downloading network would legally operate and take every safety measure possible to stop network piracy.

Third generation P2P: BitTorrent, the more uploads, the faster the download becomes.
     BitTorrent or “BT” is named the third generation P2P technology and it was invented by an American software engineer, Bram Cohen, in 2001. It does not use a decentralized server to search sharing files, but connects uploaders to downloaders with a tracking file - .torrent. It eliminates the trouble of searching for sharing files across networks, but requires online forums or communities to exchange .torrent files.
 BT also features transfers between multiple peers. Although traditional P2P divides the work on a server, it remains a one peer-to-one peer downloading. Once users increase, queuing is necessary, lowering the downloading efficiency. Things are different with BT, as it makes use of the bandwidth for uploading which users do not use during downloading. Users also upload in the process of downloading. In other words, if there are more downloaders at a time, there would be more uploaders at the same time. The multi peer-to-multi peer transfer solves the problems with the download queue, so that downloading is faster and more efficient.
    With this advantage, BT has quickly grown into mainstream software for downloading. Network piracy also grows with BT. Because BT cannot hide names, whoever publishes a file on the internet can be easily found out. It should be relatively easy to search for unlicensed copiers, but is not so easy in reality for law enforcement, due to the numerous people involved. There have been judicial precedents in the United States and Hong Kong, seeking criminal liability for individuals who uploaded infringing works using BT. BT will be targeted for network infringement in the future.

Fourth generation P2P: eXeem, to hide IP addresses of transferors
     eXeem, the fourth generation P2P or the second generation BT, integrates the advantages of KaZaa and BT. It enables users to evaluate and grade downloaded files, to avoid fake or inferior sharing resources on the internet. The grading system is set up to cope with interference on the normal running of BT, such as incomplete or erroneous files released or uploaded by some motion picture companies. Also, eXeem enhanced the confidentiality in information transfers by hiding the IP addresses of transferors and encrypting the information being transferred. As a result, it has become more difficult to investigate network infringers.

     It can be said that P2P has developed side by side with lawsuits and in the process infringing conduct through network sharing is spreading throughout the world. The law seems to be staggering behind this newcomer. P2P technology has been changing as if it were playing a game with the law. Network infringement has not been lessened with legal sanctions, but turns easier and more extensive with P2P technical updates and renovations. Being seriously challenged, copyright holders have raised a higher voice to combat network infringement. Discussions are being held worldwide on the criminal liability of up loaders and downloader’s. What will the final result be in this game? Let’s wait and see what happens.


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