Grokster, facing a copyright-infringement lawsuit for having developed software used for illegally swapping music and movies, is in talks to be acquired by Mashboxx, which wants to build a legal file-sharing service, writes the AP, citing a Wall Street Journal article from Monday.
Mashboxx already has a licensing deal with Sony BMG Music Entertainment and is seeking deals with other major labels.
Mashboxx would probably have to work out a revenue-sharing arrangement with Grokster, which now has likely little or no value. Moreover, the record labels would have to drop or settle the pending lawsuits against Grokster.
In June, the U.S. Supreme Court ruled that the entertainment industry could proceed with lawsuits against Grokster and another file-sharing software developer, saying they can be liable if they encourage customers to infringe on copyrights in an attempt to grow audiences and sell more advertising.
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