In 2010 Luvdarts LLC and DigiPie sued Verizon, AT&T, Sprint and T-Mobile for copyright infringement because the carriers designed and employed a closed system that enabled their users to distribute Luvdart's and other's copyright protected content in a clandestine and untraceable manner without authorization or payment to the copyright holders while the carriers raked in billions of dollars from these activities.
The carriers claimed in district court that they did not have the right and ability nor obligation to prevent infringement of Luvdart's and other's content via this "general purpose" system that they designed. The court agreed with their argument and dismissed the case without leave to amend leaving Luvdart's copyrights and other's copyrights vulnerable to continued abuse via the carrier's system of peer to peer content distribution.
The plaintiffs claim the lack of a system of accountability and fair compensation for the creators of multimedia being distributed via the carrier's system, and the carrier's inability to comply with standard DMCA procedures reveals a blatant flaw in the carrier's system infrastructure.
Should the Ninth Circuit uphold the district court's ruling, the ramifications will be quite significant because that would enable anyone to design and employ systems that exploit other's content for financial gain without authorization or payment to the creators of that content.
Should the Ninth Circuit remand the case back to district for further fact finding and trial, the carriers may simply decide to implement a system of accountability and fair compensation for the creators of the content their system exploits. Based upon the billions of dollars the carriers have been raking in through this system, a substantial new revenue stream for the creators of multimedia content could be on the horizon.
Either way, the ruling in Luvdarts will be significant.
The YouTube video of Luvdarts v. AT&T is here - https://www.youtube.com/
A link to the case is here: http://www.docstoc.com/
Please direct all press inquiries to Glenn Clarke (424) 781-0301.