Taiwan court fines P-to-P operator, orders CEO to jail

Just a few months after clearing one company of charges related to its peer-to-peer (P-to-P) file-sharing software, a Taiwanese court on Friday ordered executives at another one to pay fines and serve up to three years in jail.

The case is the latest in a string of courtroom victories over P-to-P file-sharing sites, and suggests a steady march toward increased control over their activities. Earlier this week, an Australian court found the operators of the Kazaa file-sharing network guilty of authorizing the widespread violation of copyright works, and in June, the U.S. Supreme Court ruled that Grokster and StreamCast Networks can be held liable for copyright infringements committed by users of their P-to-P file-sharing software.

Taiwan's Taipei District Court ordered Kuro.com.tw and three executives, including the chief executive officer, to pay fines of up to NT$3 million (US$91,000) and serve time in jail for encouraging the violation of intellectual property rights via advertisements on its P-to-P Web site.

On the company's Web site, beside a button reading "Become a Member," a note announces in Chinese: "(Kuro's) MP3 music downloading and sharing Fun Zone. Over 400,000 songs currently being shared."

Without the advertisements, the verdict would have been the same as for a rival Taiwanese P-to-P software maker, Ezpeer.com, which was found not guilty of violating copyrights earlier this year, said CT Lee, Kuro's legal representative.

"We don't think this decision is fair and we will appeal," he added.

In the Ezpeer case, Taiwan's Shihlin District Court said local laws do not specifically prohibit or limit file sharing activities, and that Ezpeer did not reproduce or publicly distribute the works of copyright holders.

Representatives of the music and motion picture industries hailed the decision against Kuro.com.tw.

"These Web sites don't understand intellectual property. They're helping their customers break the law," said Robin Lee, secretary-general of the International Federation of the Phonographic Industry (IFPI) in Taiwan, during a news conference.

The Kuro.com.tw court case also involved a twist. One file sharing member of the site, a woman surnamed Chen, was given a suspended three year jail sentence for her part in violating copyrights by downloading music over the P-to-P network.

"Going after members is not our main concern, but we will do it," said IFPI's Lee.

The IFPI has already appealed the Ezpeer decision. "We will chase them to the end," he said.

Kuro.com.tw said the court decision will not affect its daily operations, and that file sharing will go on as usual.

"This decision is a big mistake. I guarantee our service will continue to run uninterrupted," said James Chen, chief executive officer of Kuro.com.tw, in a news conference.