1. Alexander E. Wehr on June 27, 2005 07:04 PM writes...

I see it as a tacit threat, but more so if grokster loses in the lower courts following this ruling.

With a lack of concrete methods to gain summary judgement, the cost of litigation itself would become a severe threat. The only way to prevent this would be to make it very hard for the **AA organizations to win a case.

If grokster still wins under this new standard it will make future litigation less likely, but a loss by grokster would open up the proverbial litigation floodgates.

In particular, i can see the force of this ruling being used in the same way the control gained over technology by the dmca was used to force the creation of the "trusted computing group". (the story from insiders is that hollywood threatened microsoft that it would use the dmca to "cut them out" of the home entertainment market if they didn't comply)

If victorious against grokster, the cartels will use the force of this new standard to push innovators of all kinds to hobble their products with DRM under threat of multimillion dollar litigation.

If grokster wins however, this may be enough to discourage the cartels.

2. Kevin Heller on June 27, 2005 07:41 PM writes...

"Will file-sharing taper off as more people are driven to legitimate digital marketplaces like iTunes, or will this drive kids and digital denizens deeper into the Darknet?"

It will do both. Music companies must realize that this decision does not mean that p2p will go away; while darknets have been given the go ahead -- uploading and downloading are still infringement; but darknets and bittorrent, by their nature, would not be found guily of inducing infringement.

3. Hunter McDaniel on June 27, 2005 09:52 PM writes...

If time and lawyers were free, then this decision would not be so unreasonable. But they're not, and that clearly give the content cartel a big advantage. Regardless of the merits, venture capital investors are going to want some assurance that their startups bright idea has the approval of Hollywood. Which is bad for the rest of us.

4. Adam Brotman on June 27, 2005 10:34 PM writes...

Ernest, I agree with you on some items, but we might sort of disagree on some others. Maybe we don't disagree - I'm curious to know what you think:

I agree with you that the Opinion of the Court was at times contradictory, confusing and somewhat out of touch. For example, the reference to the kit developed by StreamCast to be delivered to advertisers containing the press articles about StreamCast's potential to capture former Napster users was a weak example of inducement. As was the whole topic in general of urging users of Napster-compatible programs to adopt its OpenNap program. Going after Napster's customer base was a business tactic - not an inducement of copyright infringement. The Court spent way too much of the Opinion explaining how these two defendants were courting Napster's former users - but the reader is left scratching his/her head wondering how this is great evidence of promoting or inducing others to commit copyright infringement.

Also, in an example of how the court may not be in touch, it often talked about how the defendants "streamed" or "beamed" advertisements onto the screens of users. Who uses these kinds of terms to describe web advertising? Sort of worries me ... but it's not really material.

What is material, in my opinion, and where I might disagree with you, is in reference to the heart of the opinion. I agree with the basic holding in the case and one of the Court's examples of inducement.

The Court ruled that just because a device can be found to have substantial lawful uses (as well as unlawful uses), doesn't give the device's manufacturer/distributor an absolute safe harbor to make statements or take actions directed to promoting infringement by others in their use of such device. I agree with this basic idea. And I agree that, notwithstanding all of the goofy and confusing time spent in the opinion talking about courting former Napster users, there is ample evidence of such statements and actions here. Specifically, the Court pointed to the fact that StreamCast used "promotional materials showing copyrighted songs as examples of the kinds of files available through Morpheus. Morpheus in fact allowed users to serach specifically for 'Top 40' songs, which were inevitably copyrighted. Similarly, Grokster sent users a newsletter promoting its ability to provide particular, popular copyrighted materials." (Page 8 of the main Opinion).

I agree with the Court that these were examples of the defendants' affirmative intent that the product be used to infringe, and moreover that such infringement was encouraged. The Court basically was saying what seems to me to be common sense: you can't be that cavalier about promoting copyright infringement by others and get away with it. Especially when billions of examples of such infringement are occuring every month. The defendants should not have been so stupid as to use major label or studio content in their promo materials as examples of files that can be swapped over their network.

So, in the end, I agree with the holding. I agree that evidence exists that is consistent with vacating summary judgement in favor of the defendants. But, like you, I'm left confused about all the time spent on the dubious/irrelevant fact that the defendants courted ex-Napster users.

www.adambrotman.blogs.com

5. Kaninen on June 28, 2005 03:43 AM writes...

"The court’s unanimous ruling said that Grokster and StreamCast Networks, two makers of file-sharing software, are liable for the breaches of copyright that their technology allows" - The Economist

Stated differently: "The court's unanimous ruling said that [ a Company ] [ is ] liable for the [ breach of the law, unlawful use ] that [ it's ]technology allows"
>> With this line of reasoning, makers of firearms and guns should definitely be held responsible for high-school killings and gang wars casualities

6. JD Lasica on June 28, 2005 07:30 PM writes...

Alexander, I'd be surprised if Grokster wins at the trial level, given the High Court's very opaque signals of its sentiments about the company's practices. But I suspect Grokster-like companies will either move offshore or wither away, while file-sharing software written by programmers with no financial incentives will continue to proliferate.

In other words, I'm not sure how much it matters how Grokster and Morpheus do at trial. For-profit P2P companies of the future won't look like Grokster.