The plaintiffs comprise a list of over two-dozen record labels and movie studios, among them several subsidiaries of AOL-Time Warner's (NYSE: AOL) film and music divisions, several arms of the Walt Disney Holding Company (NYSE: DIS), and Virgin Records America, Inc.

The lawsuit, which was filed in Los Angeles federal court Wednesday, cited defendants MusicCity.com, Inc., MusicCity Networks (the operator of the Morpheus file-swapping service), Grokster LTD, and Consumer Empowerment BV (the operator of Kazaa, a file-sharing service similar to Morpheus) for creating a "21st century piratical bazaar where the unlawful exchange of protected materials takes place across the vast expanses of the Internet."

In a statement issued Wednesday, Recording Industry Association of America (RIAA) president Hilary Rosen said that neither the movie nor the recording industries can "sit idly by while these services continue to operate illegally, especially at a time when new legitimate services are being launched."

Labels on Offensive

The lawsuit comes at the same time as news reports confirming that record labels are beginning to manufacture copy-protected CDs, which will prevent purchasers from making a backup copy or from "ripping," or copying, its contents onto the purchaser's PC.

The lawsuit also comes as companies that provide services similar to those once provided by Napster have evolved and grown.

The defendants listed in the suit allegedly use Consumer Empowerment networking software known as FastTrack.

With FastTrack, such services no longer need to be connected to a central server in order to function. Instead, FastTrack seeks out user computers with fast connections to use as hubs, from which other users can connect and swap MP3s, recently released motion pictures and videos, and computer software with one another.

Profits without Permission

This latest evolution has since allied the motion picture industry with the recording industry. The motion picture industry is already coping with wholesale piracy in the Far East, among other regions.

"The filing speaks for itself," Jack Valenti, president and CEO of the Motion Picture Association of America (MPAA) said in a prepared statement. "As the complaint makes clear, those named in this suit have sought to profit from works protected by copyright, without obtaining the copyright owner's permission."

Roadblocks Likely

But unlike Napster, none of the defendants, with the exception of Franklin, Tennessee-based MusicCity, are U.S. companies. Experts believe this fact may make prosecution of the complaint more complicated and problematic.

Elizabeth Sun, senior program director of Electronic Business Strategies for META Group, Inc. told NewsFactor Network that the record companies have a difficult road ahead.

"The record companies had a chance to address this when Napster went down," Sun told NewsFactor. "Since they offered no timely alternatives, Napster-like entities will continue to emerge.

"Until they have a viable alternative with regard to DRM (digital rights management), the 'illegal' copying will continue."