It's unanimous.
By a 9-0 count the Supreme Court has held that Grokster (and its ilk) can be sued.
The decision was written by David Souter (right, in an old picture from Wikipedia), a conservative-turned-liberal appointed by the first President Bush.
Here's the key bit:
"We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."
I've highlighted the most relevant portion. To me it looks like they wouldn't hold against BitTorrent, but that Grokster's business model, which did sell the service as a way to infringe, crossed a legal line.
As written I find it hard to argue against the language, but I guarantee I'll disagree with the interpretation, especially the spin being placed on this by the copyright industries.
As I see it the decision puts a limit on the "non-infringing uses" language of the Betamax decision, but does not overturn it. Grokster falls because its business model is based on infringement. BitTorrent has no business model, and thus may be exempt.
Trouble is that is an assertion that will be tested in courts that will twist this result just as the DMCA was twisted to reach this decision. Congress was told by the Copyright industries in 1998 that the DMCA would not overturn Betamax, that it would protect fair use, that it would not be extended in that direction and should not be interpreted as going there.
With this decision -- a unanimous decision as opposed to the 6-3 Betamax ruling -- I guarantee you the industry's lawyers will try and turn this into open season on the Internet.
But can they?
As Hilary Rosen pointed out, no they can't. File sharing technology is inherent in the nature of the Internet. You can exchange files as file attachments in e-mail, or through ftp. It's that basic. It was baked into the technology before the VCR was even a gleam in Sony's eye.
No court ruling can change that. And any American attempt to write such a holding into the Internet's DNA will be fought to the Internet's destruction.
Time to go back to the market, people. Both sides have taken enough casualties in the Copyright Wars.
Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Morgan W. on June 27, 2005 06:58 PM writes...
BitTorrent is a good example of a p2p app with no intent to infringe attached, but it's also free. What if the publisher of the interesting Bits on Wheels client offered it as shareware?
iPodderX already offers BitTorrent support. Suppose someone starts offering a Podcast of "Metallica album of the week?" Is the publisher liable? What if they get emails pointing out infringement using their client? Are the liable if they don't add filtering technology? If they respond?
iTunes shares music over a LAN, ourTunes lets you grab files instead of just listen to them "live," and Network Beacon lets you share over the internet instead just a subnet. Who's inducing who?
PodWorks lets you slurp songs out of an iPod, but so does Terminal, find and cp in Mac OS X. Is Apple liable? Are the ipodhacks.com guys that tell you how to use Terminal?
I see a lot of innovation done by little guys filling in the "holes" between what the big guys think is interesting/short-term-profitable. I'm worried that it's these guys who will suffer the most from SCOTUS's Induce Act.
Permalink to Comment2. Brad Hutchings on June 28, 2005 03:46 AM writes...
Morgan, the answers to your questions are pretty easy.
1. If Bits On Wheels ends up being a tool used (for example) 80% of the time for infringement, and BOW serves ads proportional to use and thus, proportional to substantial infringement, they are misbehaving and meet the same fate as Grokster. If they don't monetize the infringement, they're probably OK, and copyright holders have to go exclusively after individual infringers.
2. If some induhvidual starts publishing Metallica song of the week without authorization, whether they use Grokster, BitTorrent, FTP, CDs, punch cards, or smoke signals, that induhvidual is the infringer! BitTorrent-like systems might complicate things by making each and every downloader party to the infringement as they then become uploaders to achieve efficiency of the system. User beware. While the copyright owners would have a tough time going after a BT software client author, an end-user who is found liable for gross infringement as a result of downloading a torrent and having it automagically republished might turn around and sue the developer. Some copyfighters seem to want a system where every actor can claim they see no evil, hear no evil and nobody can be left holding the bag for widescale infringement. I think if Grokster makes an important point, it's that the courts will find someone to hold liable, and it might very well be the developer if he's too blatant.
3. Apple has appropriate licenses with the big players. The RIAA isn't going to sue Apple, so there is an extra-legal process by which they can address features Apple offers or might want to offer. If Network Beacon starts serving ads proportional to usage and usage is 80% illicit, they have a problem under Grokster. If they just sell their software for a flat fee, tough to see the problem. Users who make music available to thousands this way sans authorization from copyright holders ought to be flogged in court.
4. Copying files for personal use has never and will never be a problem. Stripping DRM or marketing a tool that strips DRM are DMCA problems, not Grokster problems.
Today's decision was a predictable, sensible decision. Surprisingly, only a small handful of us really saw this coming. Dana has a reasonable concern that Grokster might over-embolden big copyright players. But they have to find business models which are based on infringement to apply Grokster. I am confident that techies and investors will absorb this and behave reasonably unless they actually want a fight. Willful ignorance in pursuit of trashing others' copyrights isn't gonna cut it anymore.
Permalink to Comment3. Morgan W. on June 28, 2005 10:21 PM writes...
> Morgan, the answers to your questions are pretty easy.
I disagree and after reading your answers, I think the questions are still open ones.
> 1. If Bits On Wheels ends up being a tool used (for example) 80% of the time for infringement, and BOW serves ads proportional to use and thus, proportional to substantial infringement, they are misbehaving
In this hypothetical, BOW aren't promoting, encouraging, inciting or inducing infringement. They are trying to profit from the success of their client just as the adware-supported PkZip benefits when more people find it useful.
Parts of the opinions seem to say BOW would be OK because they aren't inciting and other parts suggest that profiting from infringement is a problem. SCOTUS specifically did NOT come up with a proportion of non-infringing use to be considered a general rather than infringers' tool, so I think your 80% figure is irrelevant.
> 2. If some induhvidual starts publishing Metallica[...] that induhvidual is the infringer!
But if thousands are publishing this way, the copyright infringers throw up their hands saying that the law isn't working for them (and SCOTUS agrees), so they must go after the software developer.
> 3. Apple has appropriate licenses with the big players.
Which only covers sales from the store, not infringement by iTunes-sharing users.
> If Network Beacon starts serving ads proportional to usage and usage is 80% illicit, they have a problem under Grokster. If they just sell their software for a flat fee
The adware I've seen (for PkZip or maybe WinZip) rotated ads so the longer the client was open, the more ads were served and the more revenue generated. Network Beacon is very useful to both infringers and non-infringers. Should the infringers be abel to ruin the party?
Is any tool that's "rented" instead of "sold" with infringing uses now illegal?
> 4. [..] Stripping DRM or marketing a tool that strips DRM are DMCA problems, not Grokster problems.
I'm not talking about stripping DRM but using an app (ourTunes) that turns iTunes from a file streaming to a file sharing app and another (Network Beacon) that lets it share or stream outside a single subnet.
The files involved could be ripped from CDs (iTunes restricts streaming of iTunes Music Store music differently), so the copying could be infringing, but not a DMCA violation.
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> Some copyfighters seem to want a system where every actor can claim they see no evil, hear no evil and nobody can be left holding the bag for widescale infringement.
The one holding the bag is the one that distributed or copied without permission from the rightsholder.
"Seeing no evil" seems to be exactly what this case calls for. Grokster and Napster before them engaged infringers, but ignoring them and putting "Don't Steal Music" labels on their products would seem to please the Justices even if the behavior of users was the same.
Permalink to Comment4. Brad Hutchings on June 30, 2005 01:01 PM writes...
Morgan, the key line in the opinion written by Souter is "“The more their software is used, the more ads are sent out and the greater the advertising revenue.".
Of course, it's spot on what I predicted, and it just happens to be total common sense. I think that understanding that line ought to be the litmus test for the decade for whether one understands the legal balance of content and technology or not.
The court basically said that Betamax is still the test, except where it's so disgustingly obvious that the intent and execution of a business is to thumb nose at copyright. None of the examples Morgan cited above even come remotely close to Souter's new test.
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