A new theory with consequences

Now that the initial furor over the MGM vs. Grokster Supreme Court case has settled down and the cries from the opposing sides have faded into a grumble, we can look at the decision a little more dispassionately.

The Supreme Court's unanimous decision said Grokster could be held liable for copyright infringements committed by users of their peer-to-peer file-sharing software.

Paul McNamara, who inhabits the Net Buzz column due south of here, commented a couple of weeks ago that "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, the court said, but such capabilities offer no defense against lawsuits if accompanied by a business model and marketing that" are based on encouraging piracy.

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Now that the initial furor over the MGM vs. Grokster Supreme Court case has settled down and the cries from the opposing sides have faded into a grumble, we can look at the decision a little more dispassionately.

The Supreme Court's unanimous decision said Grokster could be held liable for copyright infringements committed by users of their peer-to-peer file-sharing software.

Paul McNamara, who inhabits the Net Buzz column due south of here, commented a couple of weeks ago that "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, the court said, but such capabilities offer no defense against lawsuits if accompanied by a business model and marketing that" are based on encouraging piracy.

That isn't exactly accurate. Having a business plan that is based on others violating the law is not illegal. Just consider radar detector manufacturers. Many of them specifically say in their ads that you can avoid speed traps and beat tickets. It turns out that the business of manufacturing and marketing radar detectors isn't illegal even though in many states the actual use of radar detectors is.

I am completely opposed to the ruling because its effects will be far greater than most people realize. To begin with, whether or not users are illegally swapping copyright content, the issue that Grokster's peer-to-peer technology has "substantial non-infringing uses" (the cornerstone of the decision in the Sony Betamax case) would seem to have been relegated to a minor concern. This is a bad thing, as it expands the scope of possible litigation to involve any technology that can transfer and or store copyright content.

The Electronic Frontier Foundation (EFF) stated: "This decision relies on a new theory of copyright liability that measures whether manufacturers created their wares with the 'intent' of inducing consumers to infringe. It means that inventors and entrepreneurs will not only bear the costs of bringing new products to market, but also the costs of lawsuits if consumers start using their products for illegal purposes."

That the Justices should throw in a new theory of copyright liability was a big surprise. This theory was based on the claim that Grokster was "aware that users employ [Grokster's] software primarily to download copyrighted files."

But are the users really illegally swapping that much copyright content so that it can be claimed to be the primary use? According to the decision, "Discovery revealed that billions of files are shared across peer-to-peer networks each month" but went on to note that this goes on "although the decentralized networks do not reveal which files are copied, and when."

So the assertion must have been based on anecdotal reports rather than fact. The decision says later on that "the probable scope of copyright infringement is staggering" - pretty amazing that "probable" was good enough.

Anyway, many of those cheering the decision say it will have no effect on businesses and technologies that intend to play the game. Not so. As the EFF pointed out, the issue of intent will become a big problem for companies developing products that could be used for infringing copyright.