Wisdom 9, Grokster 0

'Net Buzz By Paul McNamara, Network World
July 04, 2005 12:05 AM ET

. What's this?

How do most of us differentiate between Supreme Court decisions that are wise and those that are dumb?

Easy enough: The ones we agree with are wise; the others are dumb.

So having argued for years that the original Napster and now its evil spawn are nothing but music chop shops masquerading as legitimate businesses, it will surprise no one that I see only wisdom in last week's Grokster decision . (But don't get me started on the Supreme Court's eminent domain ruling, a dumb one that sullies every principle of freedom on this Independence Day.)

That the court in the Grokster case sided with the intellectual property owners is no surprise. That all nine justices did so is shocking in the sense that this court would likely split 5-4 when ruling that today is Monday.

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(As a matter of fact, 5-4 was the tally in that eminent domain decision - you know, the one where Jessica Simpson apparently wrote the majority opinion. Arrrgh . . . you got me started.)

Much wailing had been rendered before last week's Grokster ruling to the effect that a decision against the maker of file-stealing software might scuttle the court's landmark 1984 Universal City Studios vs. Sony ruling, which would in turn mean the end of technological innovation . . . if not civilization.

In that case the court ruled that even though Sony's Betamax could be used to filch copyrighted material, the technology was "capable of substantial non-infringing uses" - and that protected it from lawsuits . . . if not VHS.

Preserving that protective shield was paramount, many argued, even if it meant turning a blind eye to the rampant theft of intellectual property being fostered by the less-scrupulous peer-to-peer companies. Without Betamax, no Tivo, no iPod, no soft-serve ice cream.

Fears of a full-speed reversal of Betamax proved unfounded, however.

In a nutshell, the nine justices told tomorrow's inventors and entrepreneurs to chill out: Innovate to your heart's content, but if you're foolish enough to build a business on a foundation of someone else's intellectual property - without paying for that privilege - don't look to us for protection against the inevitable lawsuits.

(Why five of those same justices in the eminent domain case saw no wrong in a government entity taking physical property - homes - as a foundation for building condos and shopping centers is beyond me . . . OK, I'll stick to Grokster from here on out.)

In Grokster, the court quite sensibly zeroed in on what has always been the crux of the matter - illegal business practices - and not technology itself. Non-infringing uses are all well and good, they said, but such capabilities offer no defense against lawsuits if accompanied by a business model and marketing that don't pass the duck test. (They didn't actually cite the duck test, but that's what they meant.)

Tying Grokster to the coattails of Betamax always struck me as a stretch. The Sony case predated the World Wide Web, of course. If Sony's Betamax had enabled users to "share" their recordings with tens of thousands of their closest friends - as Grokster and its ilk do loudly and proudly - and if Sony had built its business plan and marketing around exploiting such "sharing," you can speculate with a fair measure of confidence that the Supreme Court circa 1984 would have ruled differently.