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Ernest Miller Ernest Miller pursues research and writing on cyberlaw, intellectual property, and First Amendment issues. Mr. Miller attended the U.S. Naval Academy before attending Yale Law School, where he was president and co-founder of the Law and Technology Society, and founded the technology law and policy news site LawMeme. He is a fellow of the Information Society Project at Yale Law School. Ernest Miller's blog postings can also be found @
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« Free Speech Perfidy at the FCC, Once Again | Main | The Future of Broadcast Censorship? »

March 02, 2005

Business Model Incentives and the Grokster Amicus

Posted by Ernest Miller

Copyfight is hosting a number of posts regarding the various amicus briefs filed on behalf of the Grokster respondants. See, Grokster Ass-Kicking Commences, Venture Capital Speaks, Intel: If Betamax Ain't Broke, Don't Fix It, Berkman Profs: Betamax Ain't Broke. If There's a Problem, Let Congress Help, Media Profs on Grokster: Don't Forget Fair Use, and Eben Moglen & Co. on Grokster: Look Past the Rhetoric. Keep checking back for more.

I haven't read them all, yet. However, I have read the brief from Berkman (Brief of Amici Curiae Internet Law Faculty in Support of Respondents [PDF]). The brief is in three sections. The first part is a description of innovations that would be threatened by a new secondary liability standard as well as a takedown of two of the main academic arguments in favor of Hollywood's position from professors Lichtman, Landes and Arrow.

The second section is an argument that there are business model solutions to the P2P problem, such as Apple's iTunes. Indeed, there is a business model solution. However, one argument that isn't frequently made is that the secondary liability standard that Hollywood promotes has perverse incentives. If, as they argue, technologies should be liable based on the prevalence of infringing activity using the technologies, the incentive is for Hollywood to passively encourage infringing content in order to gain control over the infringing technology.

Imagine the VCR. What if Hollywood had, as they originally did, continued to price pre-recorded videotapes at well over $100 a piece (instead of <$20 as they do now)? Well, there would be a lot more videotape piracy as people would be unable to easily afford to purchase them.

Now consider P2P. What if there were no iTunes? What if there were no Napster 2.0? Or what if there were, but they charged outrageous rates such as $50 per downloaded album (and you could only download albums)? Wouldn't there be even more copyright infringement on the internet than there is currently? If Hollywood has its way in Grokster, wouldn't their incentives be to resist new technologies until they had a court determine the technology was primarily used for infringement and thus subject to their control?

Am I paranoid, cynical or realistic? (Or, and rightfully so, all of the above?)

The third part of the professors amicus makes the point that there are alternative means to handle problems with copyright, and that Congress should be the one to do so.

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