Record Labels Sue Spanish P2P Developer for ‘Unfair Competition?’

Unable to win a court case against file-sharers, Promusicae, the Spanish branch of the RIAA, decides to go after the software developer instead.

Pablo Soto, founder and CEO of MP2P Technologies, announced today hat he has been served with an unprecedented lawsuit from Promusicae, the organization that represents the recording industry in Spain.

Promusicae filed a claim with the Madrid Court for Commercial Matters against Pablo Soto Bravo as the creator and operator of the Blubster, Piolet and Manolito file-sharing networks for allegedly “facilitating the illegal interchange of copyrighted music.” It argues that the P2P networks he created were developed for the sole purpose of sharing music.

“All the promotional slogans on Soto’s websites urge users to swap music recordings,” reads a Promusicae press release. “Their wording, always in English, encouraged the user to ‘enter into the world of free music downloads, to download music while you chat with your friends’ or said that ‘million users in the whole world can share their music files and help the online community to grow.'”

Submitted in the lawsuit are the pictures shown below. They were apparently taken in the MP2P’s offices by private investigators hired under the guise of wanting to buy advertising on the P2P network.

Antonio Guisasola, President of Promusicae, said that this “exhaustive and well-documented” claim will be used “to fight the sense of impunity with which people take advantage of the new technologies to infringe intellectual property rights of creators and other music professionals.”

It seeks $$19.9 million USD in alleged damages, $35,000 for the PI’s it used to get the secret pics above, plus court costs. The damages are calculated with the conservative estimate that each person who downloaded one of Soto’s file-sharing programs also used it to download one copyrighted song.

“We intend to vigorously defend ourselves against this shake down attempt by the major label cabal,” said Soto. “Rather than embracing technology, they have chosen a path that will ultimately lead to their own demise, as evidenced by the label’s consistent decline over the past decade. Litigation is in itself not a valid business model for them, however, it has been a dogged and futile pursuit of theirs since the advent of P2P.”

“Promusicae tried to proceed with civil suits against users of P2P networks in Spain and, after being halted by the Court of Justice of the EU, it has decided to go against a neutral communication tool such as P2P technology,” he added.

Pablo Soto is considered one of the pioneers of P2P. In 2001 he developed the Manolito P2P file-sharing network protocol as well as two file-sharing clients, Blubster and Piolet, to use on it.

Now MP2P claims in its press release that it’s being sued for “unfair competition,” a claim which is so far unsubstantiated by Promusicae or Soto himself. At this point it appears to be a simple case of copyright infringement being that the damages sought and language used are centered squarely on the software being used to download music illegally.

Senor Soto hasn’t yet replied to my inquiries in regards to the case, but will post his remarks as well as any updated details as they come in.

Stay tuned.

**UPDATE: Had a chance to get a few words from Pablo Soto’s lawyer in response (TRANSLATED FROM SPANISH).**
ZP: The press release said that MP2P is being used for "unfair competition," but I find nothing to substantiate the claim. Promusicae instead claims that the damages sought are based on the copyright infringing practices of the the software’s users, and that Soto, as the developer and alleged promoter of the software and its practices should be held responsible financially.What is the disposition and charges alleged in the case?

PSL: The claims are based upon the downloads of the software. They allege that with a "conservative calculation", each downloader of the software has shared one copy of protected musical material. As Pablo’s companies sell software and advertisements, he is "free riding" over their property and, as free riders, they are liable and have to pay.

(Note: Apparently "free riding" refers to the unfair competition claim which is what their case is based on)

ZP: Anythign else you’d like to mention or add?

PSL: The most important one is the fact that they have not claimed for a preliminary remedial injunction to stop the activity. If Pablo would be acting against the law, they should have asked in court to for a quick previous temporary resolution as to stop his activities, which they have not done. If they would be sure about there claim, they should have asked for this immediate reolution.

Spain is the country in the world where most resolutions protecting copyleft music have been resolved. Between the 8 resolutions defending Creative Commons and Copyleft authors, the Madrilean court of Appeals resolved last July that there are two markets: the traditional one, based on copy control and DRM (Digital Rights Management) and another new one which uses Internet as its distribution channel and protects its rights with general public licenses. Soto’s software is the tool used by these authors to distribute their works, and they should be protected.

**Special THX to Hal Bringman for analysis and assistance with coverage of the story.**