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October 3, 2001

Motion Picture and Recording Industries File Suit Against MusicCity and Others

Call "Next Napster" a 21st Century Piratical Bazaar

Washington, DC - The motion picture and recording industries today filed suit against MusicCity and others for copyright infringement, calling the service a "21st century piratical bazaar where the unlawful exchange of protected materials takes place across the vast expanses of the Internet."

"We cannot sit idly by while these services continue to operate illegally, especially at a time when new legitimate services are being launched," said Hilary Rosen, RIAA President and CEO.

"The filing speaks for itself," said Jack Valenti, MPAA President and CEO. "As the complaint makes clear, those named in this suit have sought to profit from works protected by copyright, without obtaining the copyright owner's permission."

Previously, MusicCity operated an infringing Napster-like service. When contacted by RIAA they discontinued that service only to expand their infringing offerings by initiating a new service that not only provides users with music, but also movies, images and software. For example, the following films may be found on MusicCity: Legally Blonde, Planet of the Apes and the Princess Diaries. In addition sound recordings by Alicia Keys, Bob Dylan and ‘N Sync are also available on the service.

Plaintiffs filed suit against MusicCity.com, Inc. and MusicCity Networks, Inc. (which operate the Morpheus service), Grokster, LTD, and Consumer Empowerment BV [also known as FastTrack] (which operates the KaZaA service), in the United States District Court for the Central District of California.

While the three services provide user interfaces that differ cosmetically, users access the same network library. Regardless of which portal a user enters through, that user is connected to one underlying network that was created "and controlled by Defendants." Or put simply, a Morpheus user, for example, would have access to the same universe of files as a KaZaA or Grokster user.

According to the complaint, "the infringing digital files available on and through Defendants' network include illegal copies of hit sound recordings as well as recently released motion pictures, including many that are still playing in theaters and are not yet legitimately available in any other media format."

The complaint highlights that the Defendants are aware of the illegal activity occurring on their system and "are capable of controlling the activities of their users and the infringing digital files available through their network."

In addition, the Defendants' network allows users to "connect to and use a closed computer network, controlled by Defendants to reproduce and distribute infringing digital files."

Specifically, the complaint states:

“Defendants, through (a) their active participation in the unauthorized reproduction and/or digital distribution of unauthorized copies of Plaintiffs’ copyrighted works, (b) their provision of the means and facilities for unauthorized reproduction and distribution, (c) their encouragement of their users to engage in these unauthorized acts and their material contribution to their users’ acts, (d) their control over the means and facilities by which such unauthorized reproductions and distributions are effected, and (e) the substantial, direct financial benefits that Defendants derive from all of the aforesaid acts, all with full knowledge of their illegal consequences, are committing, and/or are contributorily and vicariously liable for, a vast number of copyright infringements, including infringements of the Copyrighted Motion Pictures and Copyrighted Sound Recordings."

The following companies are listed as plaintiffs in the complaint: Metro-Goldwyn-Mayer Studios Inc., Columbia Pictures Indus-tries, Inc., Disney Enterprises, Inc., New Line Cinema Corporation, Paramount Pictures Corporation, Time Warner Entertainment Company, L.P., Twentieth Century Fox Film Corporation, Universal City Studios, Inc., Arista Records, Inc., Atlantic Recording Corporation, Atlantic Rhino Ventures Inc. D/B/A Rhino Entertainment Company, Bad Boy Records, Capitol Records, Inc., Elektra Entertainment Group Inc., Hollywood Records, Inc., Interscope Records, Laface Records, London-Sire Records Inc., Motown Record Company, L.P., The RCA Records Label, A Unit Of BMG Music D/B/A BMG Entertainment, Sony Music Enter-tainment Inc., UMG Recordings, Inc., Virgin Records America, Inc., Walt Disney Records, Warner Bros. Records Inc., WEA Interna-tional Inc., WEA Latina Inc., and Zomba Recording Corporation

Complaint

Complaint Exhibit A

Complaint Exhibit B

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