Despite Court ruling, file sharing still thrives

Snocap — founded by Shawn Fanning, who had pioneered file-sharing with his creation of the original Napster — positioned itself two years ago as key to legitimate P2P services. To date, however, no one is using its technology for allowing recording labels to manage what songs could be shared on such services.

Only one service, iMesh, has made the transition. Its operators settled a copyright lawsuit in 2004 and relaunched as a licensed music service in November.

Talmon Marco, president of the New York-based iMesh, said it's been difficult competing with well-marketed music services such as the Apple's iTunes Music Store and with free, albeit illegal P2P swapping. Marco won't say how many people use iMesh.

Grokster Ltd. ultimately settled out of court and stopped distributing its software. Although users could still run copies they downloaded before, the programs are no longer supported or kept up to date, meaning users are likely to flock elsewhere.

Meanwhile, litigation continues against StreamCast Inc., which distributes Morpheus, and Sharman Networks Ltd., the firm behind Kazaa.

The case is back in federal court in Los Angeles. Ongoing attempts to settle have led to postponement of court proceedings, but a settlement has yet to be announced. The next hearing is scheduled for July 10.

Asked why the recording industry has not taken advantage of Grokster to sue additional file-sharing companies, Bainwol said the industry has concentrated on reaching out of court settlements with P2P firms to avoid further litigation — for now.

"We have been judicious and reasonable and patient," Bainwol said. "That does not mean that our patience will last forever."

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