Supreme Showdown for P2P's Future

[BJ_M]

When Grokster and MGM Studios square off Tuesday in front of the Supreme Court, the lawyers will argue copyright law. But the court's decision will affect how people use entertainment and share information.

The highly anticipated case, MGM Studios v. Grokster, pits all the major movie studios and record labels against Grokster and StreamCast Networks, two operators of file-sharing services.

The entertainment companies petitioned the Supreme Court to take the case after the 9th U.S. Circuit Court of Appeals ruled in August that file-sharing companies are not liable for their users' copyright infringement. The decision upheld a lower-court ruling from April 2003.

The appeals court based its ruling on the 1984 Supreme Court Sony Betamax case. In that case, the court ruled Sony's videotape recorder was a legal device because it was "capable of substantial non-infringing uses," even though it could be used to violate copyrights. The case is credited with leading to a lucrative home-video and DVD market for the entertainment companies. The decision also provided innovators with a benchmark to support the development of new products.

A number of emerging-technology companies are among the Grokster supporters who have filed a friend-of-the-court brief in the case, concerned that a ruling for the entertainment companies could stifle innovation and harm their businesses.

"The large content players ... are trying to shift the enforcement burden to the tools manufacturers," said Scott Rafer, CEO of Feedster, a blog search engine. "That directly impacts my business."

Rafer said Feedster already removes copyright material from its site when it receives Digital Millennium Copyright Act takedown notices from copyright holders.

"If we have to look (at) every piece of inbound stuff that comes in for copyright materials, then most of the internet tools that we use every day would be illegal," Rafer said.

"All these internet technologies share this common mass-copying capability: e-mail, web servers, web browsers, basic hard drives," said Jason Schultz, an attorney with the Electronic Frontier Foundation, which represents StreamCast Networks. "There's no principal distinction between (P2P) and other internet technologies in the way it's designed.

"I think the court will find it very, very difficult -- if not impossible -- to draw any distinctions between the programs in front of them in this case and other internet communication programs," he said.

Also signing on to the emerging technologies' amicus brief are companies like Kaleidescape, which markets a product that permits people to store personal DVDs on a secure home server and access them from any room in the house. And Slim Devices, maker of the Squeezebox that people can use to stream music from a home computer to a stereo, has signed on.

But defenders on the entertainment side say the 9th Circuit was wrong, and the peer-to-peer companies should be held liable for the massive copyright infringement occurring on their networks.

"The principal use of the Betamax was for time shifting, and that time shifting is a fair use," said Fritz Attaway, executive vice president and Washington general counsel for the Motion Picture Association of America. "In the Grokster case, the opposite is true. The overwhelming use of Grokster is for infringing purposes."

William Hart, an attorney who represents the National Academy of Recording Arts & Sciences, best known for its Grammy Awards, said the vast majority of people who use file-sharing sites are coming to "lift a copy of a commercial recording and make a copy for (themselves). If that's really the use to (which) the device is put, and that's really why it's attracting people and that's why it's attracting the advertisers, then that has to be factored in to the analysis of whether the device is really an item that is infringement-neutral."

Still, while some artists oppose file sharing, others believe the technology is an important tool they can use to reach new audiences. About 20 artists, including Heart, Chuck D, DJ Spooky and Brian Eno, filed a separate friend-of-the-court brief in support of the P2P services.

"Copyright law as it's being practiced and lived are two different things," said Paul Miller, also known as DJ Spooky. "Shareware culture is here to stay." He said the entertainment industry has a "neo-medieval mentality. They need to update their (business models)."

The Supreme Court is expected to rule on the case in June. Whatever the outcome, observers think the issue may end up in Congress.

In Congress' last session, entertainment companies fought mightily to pass the Inducing Infringement of Copyrights Act, which would have held technology companies accountable for copyright infringement committed by people who use their products. Technology and consumer groups were staunchly opposed to the legislation, and the bill ultimately failed to pass in the Senate Judiciary Committee.

[Sabro]

So I guess we'll see tons of Grokster branded devices like all the Napster gizmos on the market today?

Funny how all the high speed internet services (atleast around here) promote downloading music and movies to boost the sales of their services, but never tell the 'new' users that some of the content may be illegal.

Odd they are never including in these lawsuits as well.. Post record earnings, and sue the world for your estimated losses....HEY I hear sirens....WHIPLASH!

Sabro

[AlecWest]

Funny how all the high speed internet services (atleast around here) promote downloading music and movies to boost the sales of their services, but never tell the 'new' users that some of the content may be illegal.

That's quite true. But nowadays, they can say, "Well, we just meant the legal services for music (iTunes) and movie (CinemaNow.com) content." Still, it's clear that the broadband Internet industry's ad content was ambiguous and unclear on that point.

I've read that a decision in this case isn't expected until near the end of summer ... that besides the arguments of the "principals" in this case, they have to hear the arguments of nearly 75 content providers who filed "amicus" briefs with the court. The Court may even defer a decision until after their late-summer break ... when they reconvene in October. There's just too much at stake to make a legal blunder. What they decide will not only affect the principals involved but also current technology providers and future technology developers.

My guess is that they'll eventually make some kind of ruling ... but one that leaves open a huge window of opportunity for Congress to make new laws. Our most recent Supreme Court has a track record of passing the buck back to "somebody" (another court, another jurisdiction, lawmakers, etc.) so I don't expect anything of "landmark" proportions.

BTW, here's a recent article that provides more insight to the case and links it to AllOfMP3.com:

http://slate.msn.com/id/2115868/

[TomJones]

The latest

http://abcnews.go.com/Politics/wireStory?id=623050

WASHINGTON Mar 29, 2005 — The Supreme Court expressed concerns Tuesday over allowing entertainment companies to sue makers of software that allows Internet users to illegally download music and movies, questioning whether the threat of such legal action might stifle Web innovation.

During a lively argument, justices wondered aloud whether such lawsuits might have discouraged past inventions like copy machines, videocassette recorders and iPod portable music players all of which can be used to make illegal duplications of copyrighted documents, movies and songs.

Justice Stephen G. Breyer said the same software that can be used to steal copyrighted materials offered at least conceptually "some really excellent uses" that are legal.

Justice Antonin Scalia maintained that a ruling for entertainment companies could mean that if "I'm a new inventor, I'm going to get sued right away."

[Gurm]

The latest

http://abcnews.go.com/Politics/wireStory?id=623050

WASHINGTON Mar 29, 2005 — The Supreme Court expressed concerns Tuesday over allowing entertainment companies to sue makers of software that allows Internet users to illegally download music and movies, questioning whether the threat of such legal action might stifle Web innovation.

During a lively argument, justices wondered aloud whether such lawsuits might have discouraged past inventions like copy machines, videocassette recorders and iPod portable music players all of which can be used to make illegal duplications of copyrighted documents, movies and songs.

Justice Stephen G. Breyer said the same software that can be used to steal copyrighted materials offered at least conceptually "some really excellent uses" that are legal.

Justice Antonin Scalia maintained that a ruling for entertainment companies could mean that if "I'm a new inventor, I'm going to get sued right away."

WOOOO!

My faith in our legal system is restored. You can always count on the Supreme Court to bitchslap EVERYONE around.

[AlecWest]

WOOOO!

My faith in our legal system is restored. You can always count on the Supreme Court to bitchslap EVERYONE around.

I wonder if, among all those amicus briefs filed with the Court, there's one from the Real Estate industry. I've heard that a number of realtors rely on P2P services to transfer multilisting data on properties to other agents around their communities and around the world.

Bottom line is that the industry is looking for the Court to make a wide-ranging panacea solution to their problems ... and it ain't gonna happen. But it doesn't mean the battle is over. Basically, the Court is just implying, "You're asking the Judicial branch to legislate ... and we don't do that. See a legislator next."