August 07, 2006

Jenner & Block, with the Recording Industry Association of America (RIAA), the International Federation of Phonographic Industries (IFPI), and counsel on three continents on behalf of the world's major record companies, recently negotiated what is believed to be the largest copyright infringement settlement in history.  The settlement, which Jenner & Block played a lead role in brokering, is a worldwide deal that resolves the long-running copyright infringement litigation against Kazaa, one of the world’s most popular peer-to-peer file-trading networks.  The agreement resulted in a settlement amount in excess of $100 million for the record companies.

According to the terms of the settlement, the Kazaa network will also introduce “filtering technologies” to ensure that its users cannot distribute copyright-infringing files in the future.  The settlement concludes three different lawsuits filed in the United States and Australia.

This settlement was “a direct and inevitable extension of the U.S. Supreme Court victory in the Grokster case, as well as the tremendous success the record companies achieved in their groundbreaking Australia litigation” said Partner Steven B. Fabrizio, who served as lead negotiator for the legal team representing the record companies.  In Grokster, the Supreme Court unanimously ruled that individuals or organizations that promote copyright infringement by users of their service may be held liable.  Jenner & Block Partner Donald B. Verrilli, Jr. successfully argued the Grokster case before the High Court last year.

The Grokster decision “struck a wise balance between protecting innovation and the rights of creators,” said Mitch Bainwol, Chairman and CEO of the Recording Industry Association of America, and brought “legal and moral clarity to the marketplace.”  “This is welcome news for the music community and the legal online music marketplace.”

As one of the world’s major peer-to-peer file-trading networks, Kazaa was declared the “most downloaded software ever, at 239 million downloads,” according to IFPI.

The settlement of the Kazaa litigation has created a “win-win scenario” for the music industry and consumers, lauded IFPI CEO John Kennedy.  “Our industry will have a new business partner and consumers will experience new ways of enjoying music online, with more choice” he said.

The members of the Jenner & Block legal team on this matter also included Partners Ian Heath Gershengorn and Mark D. Schneider and Associates Iris E. Bennett and Scott B. Wilkens.