Like Kazaa and other popular file-sharing programs, Grouper allows [USC law professor Jennifer] Urban to copy movies and pictures of young Peter directly from her brother and sister-in-law's computer without worrying about formats or oversized e-mail attachments. Unlike those global networks with millions of users, though, Grouper also lets Urban pick and choose with whom she shares online — and sets a strict limit of 30 people per group.

"I'm very attracted to the privacy afforded by having a private group protected by encryption, particularly for sharing letters, family photos, movies, etc.," Urban said. "This isn't the case with other peer-to-peer networks."

What makes Grouper troubling to some entertainment industry executives are the other things people can do with it. For example, the program lets people copy bootlegged Hollywood movies and listen to songs on one another's computers, all without paying a dime to the studios, artists or songwriters.

Grouper Network Inc.'s founders, Josh Felser and Dave Samuel, say the built-in limits of their peer-to-peer software make it a poor substitute for more controversial file-sharing programs such as Kazaa and Grokster, which are hotbeds for piracy. In addition to limiting the size and accessibility of groups, they say, their program requires songs to be streamed — that is, played through the Internet — not downloaded.

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