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ALEX VEIGAAssociated PressLOS ANGELES - StreamCast Inc., the company behind the Morpheus online file-swapping software, said Friday negotiations to settle a longrunning copyright battle with the entertainment industry have failed and the firm will now seek to fight the case in court."I am really disappointed that we weren't able to reach settlement terms with the plaintiffs," said StreamCast CEO Michael Weiss. "Now we want our day in court."The company planned to file a motion with U.S. District Judge Stephen Wilson in Los Angeles later in the day seeking a jury trial and responding to a demand for summary judgment by the Hollywood movie studios and recording industry plaintiffs, Weiss said.The entertainment firms' motion was filed under court seal.Weiss would not provide details on what caused the breakdown in negotiations, but said both sides were "really quite close" before that."It really wasn't a matter of money. It was something that turned what looked to be a full-on partnership into a one-sided, unworkable deal," Weiss said. "What happened (is) this outside law firm that mucked this whole thing up ... seeking revenge, retaliation and retribution."A spokeswoman for the Recording Industry Association of America, which represents major recording companies, did not have an immediate comment Friday.The move by StreamCast represents a turnaround from only a few weeks ago, when StreamCast and representatives for the film studios and music companies began talks to settle the case.The entertainment companies sued StreamCast, Grokster Ltd., the firm behind the Grokster file-swapping service, and Sharman Networks Ltd., which distributes Kazaa, in 2001.Wilson ruled in 2003 that the file-sharing service operators were not liable for any illegal copying of music, movies and other works conducted by the services' users. The ruling was later held up by an appeals court in California.But last June, the Supreme Court opened the file-sharing firms to potential liability, ruling that companies found to intentionally induce or encourage the theft of copyrighted works could be held liable.Following the high court's decision, the entertainment industry sent notices last fall to seven file-sharing software firms warning them to shut down or prepare to face lawsuits.Some firms behind services such as i2Hub and WinMX, closed up shop. Others, including Grokster and iMesh, settled with the entertainment industry as a precursor to launching licensed versions of their services.Companies behind popular file-sharing services eDonkey, LimeWire, BearShare and others have also reportedly been pursuing settlement talks.In December, Weiss said the company was focused on settling the case, if it could find acceptable terms to continue operating. The company has spent some $4 million over the past five years defending itself from entertainment industry litigation.If StreamCast does get its day in court, its lawyers will have to contend with the Supreme Court's expanded definition of copyright liability.Weiss, however, dismissed the impact of the high court's ruling."We haven't induced anybody to do anything since day one," he said Friday. "We're not going to lose this."
Some firms behind services such as i2Hub and WinMX, closed up shop. Others, including Grokster and iMesh, settled with the entertainment industry as a precursor to launching licensed versions of their services.
