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Grokster and StreamCast, distributors of peer-to-peer file-sharing software, are not contributorily or vicariously liable for users' copyright infringements, the federal Ninth Circuit Court of Appeals held Aug. 19.

Rejecting an appeal by film and music copyright owners, the court affirmed the U.S. District Court's granting of partial summary judgments in April 2003.

The Recording Industry Assn of America, the National Music Publishers' Assn. and the Motion Picture Assn. of America originally filed the suit in 2001. Unlike Napster's first incarnation, which had a centralized index of files, Grokster and StreamCast use "decentralized" P2P models.

RIAA chairman/CEO Mitch Bainwol said, "This decision does nothing to absolve these businesses from their responsibility . . . to address the rampant illegal use of their networks. We will continue to pursue legislative solutions and legal actions to address the ongoing illegal activity facilitated by Grokster and other P2P services."

StreamCast CEO Michael Weiss said, "This is a win for our fellow P2P developers and a victory for American innovation."

The decision is limited to specific software in use at the time of the District Court's decision. The copyright owners also seek relief based on different versions of the software. The case was remanded to the District Court to resolve the remaining issues. SUSAN BUTLER and BILL HOLLAND



BMI announced Aug. 17 that its fiscal 2004 revenue rose 6.8% from the previous year to $673 million, a record for the New York-based performing-rights organization.

BMI also reported that royalties generated for its songwriter, composer and music publisher members increased 7.5%, to a record $573 million during the fiscal year, ended June 30.

International revenue rose 35% (aided by favorable exchange rates) to $186 million. New-media revenue increased 70%, partly because of licensing deals with more than 100 new mobile content companies. CAROLYN HORWITZ



Navarre Entertainment Media senior VP/GM Steve Pritchitt exited the company Aug. 20, sources tell Billboard. Pritchitt had headed New Hope, Minn.-based Navarre's music distribution operations since April 2001, when he succeeded Jim Chiado. He joined the company in early 2000.

Pritchitt's departure from the company came little more than a week after Navarre announced a series of wide-ranging changes in its sales staff. A Navarre representative declined to comment. CHRIS MORRIS



Fat Possum Records and owner Matthew Johnson have sued former joint-venture partner Epitaph Records for a to-be-determined amount, alleging that Epitaph hatched "a malicious plot . . . to financially destroy" the company.

The suit, filed Aug. 17 in California Superior Court in Los Angeles, alleges that Oxford, Miss.-based Fat Possum—home of R.L. Burnside and Junior Kimbrough—was funded at a loss by Los Angeles-based Epitaph under the terms of a July 1997 agreement. The action maintains that in October 2003, as Fat Possum appeared to be moving into profitability, Epitaph told the blues label it would no longer fund operations or pay Johnson's salary.

The suit alleges that under financial duress, Johnson agreed to buy back Epitaph's interest in Fat Possum for an unstated price and that he was forced to add $50,000 to the redemption price and give up distribution rights to albums by Solomon Burke and the Black Keys.

Doug Mark, Epitaph's attorney, says he has not seen the filing. But he adds, "Why would my client put a company out of business? It is impossible to comprehend . . . Epitaph's reputation for integrity speaks for itself." CHRIS MORRIS



Spring Hill Music Group president Scott Chancey resigned Aug. 17.

Chancey joined the Nashville-based label in 1996 as VP of sales for the Spring Hill Record division and was named president of SHMG in 1997. Following Chancey's departure, CFO David Robinson was appointed CFO/COO. SHMG includes the Spring Hill label, whose roster includes Southern gospel/inspirational acts the Oak Ridge Boys and the Martins. DEBORAH EVANS PRICE



Sony BMG COO Michael Smellie sent a memo Aug. 17 offering either early retirement or a voluntary severance program for all eligible employees who choose to leave the company. More than 2,000 members of Sony BMG's international staff are expected to be cut.

"We have designed these programs to offer you an opportunity to separate from Sony BMG with a favorable exit package that would not otherwise be available to you," Smellie wrote.

Sony BMG reps declined to comment further. TAMARA CONNIFF



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