Some of the world's biggest record labels have failed in their attempt to sue a file-sharing developer for copyright infringements carried out by users of his software. During a 2009 trial, Universal, Sony, EMI and Warner had demanded 13 million euros in compensation from Pablo Soto, the creator of the Blubster, Piolet and Manolito P2P sharing applications. A court has now ruled that Soto's technology is "completely neutral".

In 2008, Universal, Sony, EMI, Warner and “Spanish RIAA” Promusicae (Productores de Música de España) joined forces to file suit against MP2P Technologies, a company created by Spaniard Pablo Soto.

Born in 1979, Soto had been in the computer business since he was 16 years old and had created several file-sharing applications including Blubster (the so-called “Spanish Napster”) Piolet and Manolito.

But the record companies claimed that Soto designed the software with the express intent of providing a platform for Internet users to download and share music for free, a situation they describe as “unfair competition.” Pablo was also accused of creating file-sharing applications in order to profit from infringements of the plaintiffs’ copyrights.

Following a 2009 trial and several years of litigation, Madrid Commercial Court No. 4 has now delivered its verdict. It rejected the compensation demands of the labels and ruled in favor of the developer, declaring that his technology is “totally neutral.”

“An analogy would be like if we created a private group of friends to share some information, photographs for example,” the judge wrote in his ruling. “But you can not then blame the developer [if people chose to share copyright material], since the only thing he has done is connect the friends.”

The court also rejected the claims of unfair competition, noting that Soto isn’t in the business of making and marketing records, and the plaintiffs aren’t in the file-sharing business.

“We are extremely grateful to the court for finding not only in our favor, but in favor of justice, innovation and in equal access to digital distribution,” said Pablo Soto, founder and CEO of MP2P Technologies. “The copyright conglomerates would like to stifle innovation but today’s significant ruling against this tactic echoes around the globe.”

In an interview with 20minutos.es, Soto extended thanks to his lawyers Javier de la Cueva and David Bravo and noted that although delighted with the outcome (“I feel like i’ve crossed the Gobi desert with no water”), both he and his company have been deeply affected by the litigation.

“I had a company with eight years of work behind it but following the lawsuit I had to reduce staff by more than a half,” said Soto. “The funding was reduced to zero, no-one wanted to invest in a company being sued for 13 million euros.”

Aside from the generalities of the complaint, the case has been controversial since the start. In preparation for filing suit the labels went as far as to hire a private detective who turned up at Pablo’s offices masquerading as a customer. Using a hidden camera the detective took photographic ‘evidence’ which later turned up in court filings.

Promusicae president Antonio Guisasola said the decision will be appealed and expressed hope that in future the new Spanish government would take “resolute action” against people like Soto.