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Can The Grokster Settlement Close Pandora's Box?

By Sean F. Kane

On Nov. 7, 2005, Grokster LTD (Grokster) filed documents in a Los Angeles federal court reporting that it had reached a settlement in its lengthy legal case with the nation's largest record companies, motion picture studios and music publishers (as represented by the Recording Industry Association of America (RIAA)).

As part of the reported settlement, Grokster admitted monetary liability in the amount of $50 million dollars and agreed to immediately shutter its popular peer-to-peer (P2P) file sharing service. Grokster's Web site was changed the same day to state that its existing file-sharing service was illegal and no longer available. Specifically, the site states that: “There are legal services for downloading music and movies. This service is not one of them.” However, the Web site notes that Grokster hopes to have a “safe and legal” replacement available soon apparently under the proposed name “Grokster3G.”

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