Alwayson network claims that a recent survey conducted by Online Testing Exchange (OTX) and distributed by the Motion Picture Association of America (MPAA) is crap. The MPAA's summary of the survey claims, among other hard-to-believe assertions, that 'about one in four Internet users have downloaded a movie.' (It turns out this isn't true, but this is the factoid that was heard around the world the following week.) When did you stop trusting sponsored 'research'?

Following the lead of a lower court decision last year, the Ninth Circuit Court of Appeals said that peer-to-peer software developers could not be held liable for the copyright infringement of people using their software, as long as they had no direct ability to block the acts.

"The (record labels and movie studios) urge a re-examination of the law in the light of what they believe to be proper public policy," the court wrote. "Doubtless, taking that step would satisfy the copyright owners' immediate economic aims. However, it would also alter general copyright law in profound ways with unknown ultimate consequences outside the present context."

A group of 46 state attorneys general sent a deeply critical letter to file-sharing companies Thursday, asking them to take stronger action on privacy and intellectual-property violations.

In Washington, Sen. Orrin Hatch, R-Utah, is sponsoring a bill that would hold file-sharing companies liable for the illegal actions of their users, a measure that could push the existing commercial networks out of business.

The letter specifically asks that file-sharing companies stop encrypting network transmissions in ways that make it difficult for law enforcement to investigate and enforce the law.

"This appears to be a case of contempt prior to investigation," StreamCast Networks CEO Michael Weiss said. "This appears to be a continuation of the lies and deceit being perpetrated by the entertainment industry against P2P companies to Congress, the American public and now the offices of the attorneys general."

Copies of the game on file-sharing networks and newsgroups are being downloaded by thousands of people.

At one point on Sunday, more than 50,000 copies of the game, which weighs in at more than 1.5 gigabytes, were being downloaded.

Translated in lost sales, this amounts to $2.7m (£1.5m), if all these people instead bought the game.

"Despite the relatively low price of PC games, many gamers are still choosing to resort to piracy rather than pay for legitimate boxed copies," said Matt Pierce, publisher of the computer games magazine, PC Gamer.

"Whereas in the case of Doom 3, it almost certainly won't prevent the game being a massive seller, it will still cost both the publishers and developers of the game millions of dollars in lost revenue, an outcome that can only serve to harm future game development on the PC," he told BBC News Online.

The chairman of the U.S. Senate Committee on the Judiciary said Thursday that a ban on file-trading networks is urgently required but agreed to work with tech companies concerned that devices like Apple Computer's iPod would be imperiled.

Hatch added, however, that he welcomed comments from critics. "If you help us, we just might get it right," he said. "If you don't, we're going to do it. Something has to be done. There's no way to solve these problems so everyone's totally pleased."

The Induce Act "would chill innovation and drive investment in technology" overseas, said the letter, signed by CNET Networks, eBay, Google, Intel, MCI, TiVo, Verizon Communications, Sun Microsystems and Yahoo.

An Israeli technology company that makes popular software for downloading music over the Internet agreed Tuesday to pay $4.1 million to the recording industry for copyright infringement, a significant victory for music labels.

Bridgemar Services Ltd., formerly known as iMesh.com Ltd., agreed under a court-approved settlement to change its Internet service later this year to prevent consumers from illegally distributing music or downloading songs. The iMesh software has been downloaded more than 76 million times.

The settlement, reached in U.S. District Court in New York, represents one of the rare efforts by the recording industry to successfully sue technology companies producing software that allows Internet users to exchange pirated songs and other files, rather than suing Internet users individually.

"The constructive approach of iMesh stands in stark contrast to other file-sharing businesses who thumb their noses at Congress, continue to offload liability onto users and dupe America's kids into breaking the law," RIAA chief Mitch Bainwol said.

It seems logical that the headquarters of a file-sharing network would be located offshore, far from the reach of the long legal arm of the Recording Industry Association of America or Republican Utah Sen. Orrin Hatch.

But Jed McCaleb, founder and CTO of file-sharing network eDonkey, and Sam Yagan, president of the company, don't have to wonder whether the Hatch bill will affect their business.

Still, they plan to continue to be very public about the location of their New York City office -- on 14th Street between Fifth and Sixth, just west of the famed Union Square Greenmarket, in a brightly painted room that looks a whole lot like the nursery of a particularly geeky toddler.

"Then what will happen is networks will spring up in jurisdictions that don't recognize U.S. laws or judgments. My favorite example is Earthstation 5. Here's an excerpt from its website:

"'Please take notice: EarthstationV Ltd., a Palestinian corporation, does not accept any legal process via e-mail, nor will we accept any attachments via e-mail. For service of process, you must serve our legal department located at our offices in the Jenin refugee camp, Jenin, Palestine.'

In the past month, Winwood's label has seen a noticeable increase in record sales thanks to a promotion that included releasing a free song and video over file-trading services. The campaign was part of an experiment in whether peer-to-peer can be used to create buzz around an artist and drive up sales.

Winwood's independent record label, Wincraft Music, said sales of About Time have sold up to eight times the number of records in some regions since June 15 when an audio file of one track, Dear Mr. Fantasy, made its way on to peer-to-peer networks. At the same time, a video of Winwood performing the song live and another video of a rehearsal were distributed on Limewire, eDonkey and RazorPop. The album has also been promoted through television commercials.

The Recording Industry Association of America declined to comment.

Early in the week, anti-Moore Web site MooreWatch.com posted a link to a pirated version of the film available elsewhere on a file-sharing network, noting that the director himself has publicly backed downloading the movie online.

The result has been a torrent of criticism from Moore supporters and his distribution company, Lions Gate Entertainment. The site was even the target of a denial-of-service attack a few days ago. But MooreWatch co-founder Jim Kenefick, a Web programmer in Hamden, Conn., is taking it in stride.

"Moore has said on many cases that he doesn't care if people download his movies or steal his book or sneak into his movies," Kenefick said. "If I can use his own words against him to be a bee in his bonnet, then I will."

Like many early pirated releases, the copy was shot by a handheld camcorder, with poor-quality audio and shaking visuals, Kenefick said.

In a move that indicated that he understood P2P technology extremely well, Senate Judiciary Chairman Orrin Hatch told CNET that the problem was like 'Chitty Chitty Bang Bang,' where the leering 'Child Catcher' lured children into danger with false promises of 'free lollipops'.

He said that some corporations thought they can legally profit by inducing children to steal and that they can legally lure children and others with false promises of free music.

Not surprisingly the bill's candy men are the Music and Entertainment industry, which ironically have been working to catch children in a raft of writs and taking them to court for copyright infringement.