Grokster, Cable and The Supreme Court

I’m still trying to determine the likely results of two Supreme Court decisions today on P2P file sharing and the cable industry. Although I initially worried about the Grokster loss on the former, I’m more puzzled by the decision on the latter…

OK, so Grokster loses and all P2P systems are now considered guilty until proven innocent. Maybe. I’ve been following a Grokster Roundtable on The Wall Street Journal’s website (subscription required). John Palfrey, executive director of the Berkman Center for Internet & Society and co-author of a brief that supported Grokster’s position had this to say:

Imagine you're the entrepreneur in your garage: can you figure out whether your new killer application will violate copyright's secondary liability rules? If not, you'll call your lawyer. Will she be able to tell you? My hope is that future courts will set the bar high, relying upon plain text readings of words like "purposeful" and "clear."

In other words, scare tactics on this front today will (hopefully) be offset by reasonable interpretation of this ruling's intent in the future. What sort of safeguards can a P2P file-sharing tool vendor put into the program to prevent, or at least discourage, illegal activities? The first one to find an answer to that question is likely to become the new industry leader, don’t you think?

How about the other technology ruling, the one about protecting cable companies and their broadband interests? The analogy often referred to is the one years ago when the phone companies had to lease their lines to competitors, resulting in intense competition, broader consumer choices and lower prices. What was so bad about that?! I’m dreaming of the day when I can tell my cable company I’m switching to another broadband provider. Instead, I’m stuck with them because I don’t want to switch to DSL just to get a lower monthly rate for a limited period of time. Why can’t we introduce true competition here and let the best company/plan win?


Brad Hill

The real winner in the Grokster ruling is the law profession. New technology companies have to be more careful than ever now, and enlist legal interpretative assistance at every step. But it's too much to say (even rhetorically) that P2P companies are guilty until proven innocent. The ruling is about *intent* to induce infringement, and avoids the question of whether or not file-sharing technology is legal. The judges did cite overwhelming evidence of culpability in the defending companies, but that evidence pointed to marketing and other expressions of "unlawful intent." It did not address the inducement effect of the technology itself.

Making intent a decisive factor defines a slippery slope, no question about that, but it gives media companies a firmer foothold than the summary judgments that were throwing their cases out of court before now. This ruling dismantles the summary Grokster defense of safe harbor, but does not necessarily decide the result of its reopened trial. As a precedent, the ruling gives content companies some favorable language to work with, but does not necessarily clarify the legal tests necessary to easily decide secondary infringement cases. Bit Torrent, for example, is probably the leading file-sharing platform currently, and its creator Bram Cohen has been fastidious in his disrespect for unauthorized downloading. As an open-source project, Bit Torrent does virtually no marketing. It is widely used for authorized distribution, and Microsoft is developing file-sharing technology based on BT principles. I can't imagine unlawful intent or willful inducement being demonstrated in court!

But I'm not a lawyer, and I haven't finished plowing through the decision texts and all the commentary.

Jim Minatel

Wow, Brad's given a much better analysis of the ruling than I could hope to give. I'd add in my $0.02 that I agree completely that the ruling here is about intent and it's 100% clear to me that Grokster intended to create a product/service they new would be used primarily for illegal file sharing.

While I'm no fan of music indutry and hollywood practices, I think those of us in publishing need to support decisions that reasonably protect intellectual property as this does.

Joe Wikert

Agreed, but it will be interesting to see how this is interpreted in the future...

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