is the Little Engine That Could. So far, against
overwhelming odds, it has successfully dodged every legal bullet a massive
horde of entertainment companies - some 28 of them, representing the
interests of the music recording and movie industry - have thrown at
it. Now, there is one more hill, and it's the steepest of them all, a
hearing before the US Supreme Court in March.
There is a lot more at stake than just the fate of a couple of peer-to-peer file
sharing services. What's at stake, to quote from one of the many
amici briefs filed in this high-profile case (this
one by the Computer & Communications Industry Association and
NetCoalition) is nothing less than this: it's a push to overturn the
court's ruling in
Sony Corp. of America v. Universal City Studios, 464 U.S. 417
(1984) (the "Betamax case") and replace it "with new standards that
would as a practical matter
give the entertainment industry a veto power over the development of
innovative products and services."
The appearance of amici briefs from
such technology groups and associations in Grokster marks the first
time we've seen them join the P2P fray, a recognition that technological
innovation is at odds with some of the desires of the
Of course, Hollywood doesn't tell it that way. To them, what is at stake
is expressed in their brief to the Supreme Court. Here [PDF] is how the recording and movie
studio petitioners' brief phrases the question they think is before the
Whether the Ninth Circuit erred in concluding, contrary to
long-established principles of secondary liability in copyright law (and
in acknowledged conflict with the Seventh Circuit), that the
Internet-based "file sharing" services Grokster and StreamCast should be
immunized from copyright liability for the millions of daily acts of
copyright infringement that occur on their services and that constitute at
least 90% of the total use of the services.
abundant hyperbole on display in their brief as well. Life will, in their
eyes, more or less not be worth living if they don't prevail. On page 29,
for example, they write: "Respondents thus erode not only the public
perception of the value of sound recordings, musical compositions, and
motion pictures, but respect for the very foundations of copyright law in
the digital age."
The Songwriters brief [PDF], representing, they
say, 27,000 songwriters and music publishers "who own the copyrights in
more than 2.5 million songs," waxes poetic about creativity and money.
They have united, they say, to "confront 'the monster that is now
devouring their intellectual property rights.'" Their world view is
simple and clear. They want their money, and they want it now. And both
groups want it from Grokster and StreamCast, without the hassle and poor
returns one might expect from individual lawsuits against the services'
customers. They want Grokster and StreamCast held liable for the
infringing acts of their customers, nothing less, despite the lower
court's ruling that they had no control over their users. "Poppycock,"
responds the entertainment industry. If they just wanted to, they could.
Take note of the reference to the 90% figure, although the accuracy of the
figure itself is disputed by EFF.  It's a key part of the plaintiffs'
strategy to get the court to reinterpret the Sony Betamax ruling,
which held that a distributor cannot held liable for users' infringement
so long as the product is "capable of substantial noninfringing use." It
is on that sentence that Grokster and StreamCast have survived so far.
But now the argument is being made that the noninfringing use of these
services is a tiny fraction in comparison to the infringing use, and it
isn't conceivably commercial use, so in their eyes, it doesn't count. The
word they use is "incidental". You can't sustain a business on
distribution of free public domain copies of the Bible or the Gettysburg
Address. Anyway, they argue, you can get those things and copyrighted
works that are authorized for free digital distribution in other ways.
They have no comprehension that some might prefer the P2P method of
distribution over any other, or that it is worth entertaining seriously.
Peer to peer is faster
and easier and simpler than previous distribution methods. Instead of
a funnel, with a media outlet distributing through its narrow end,
everyone on the internet could just share whatever they had with anyone,
even if only one other individual in the world wanted it.
The district court's technically clueful decision, which I wrote
about as the subject of Groklaw's very first article,
said this about noninfringing use:
Here, it is undisputed
that there are substantial noninfringing uses for Defendants' software,
e.g., distributing movie trailers, free songs or other non-copyrighted
works; using the software in countries where it is legal; or sharing the
works of Shakespeare. . . . For instance, StreamCast has adduced evidence
that the Morpheus program is regularly used to facilitate and search for
public domain materials, government documents, media content for which
distribution is authorized, media content as to which the rights owners do
not object to distribution, and computer software for which distribution
What is happening now is an attempt to assert that "substantial"
noninfringing use isn't enough. It must be dominant. When you consider
the way new technology is often adopted, that could represent a
significant bar to innovation. EFF for StreamCast:
Betamax principle has the salutary effect of encouraging the incumbent
entertainment industry giants to adjust their business models to see
whether there is money to be made using new technologies. The 'primary
use' test, in contrast, gives them an incentive to let slip the dogs of
litigation as early as possible, before a new technology starts proving
its noninfringing potential.
Companies are not likely to
innovate when the risks are so unpredictable and the law is stacked against
heavily them, as the Digital
Media et al amici brief [PDF] explains:
do not condone -- indeed, they strongly condemn -- the use of peer-to-peer
technologies to violate copyright law. Neither, however, do amici support
the substantial broadening of the standards for secondary liability that
petitioners urge this Court to adopt. Amici submit this brief to apprise
the Court of the dangers to technological innovation, free expression, and
democratic values online that are posed by petitioners' position. . . .
Without the crucial protections for technology innovators recognized
in Sony, courts would be put in the untenable position of deciding
when a provider of novel technology has 'done enough' to prevent
intentional misuse by others. Worse yet, courts would be called upon to
balance the theoretical cost-efficiency of potentially unproven design
changes that a technology provider might make to reduce the risk that
technology users might violate copyright laws. Under such a regi with great trepidation,
training one eye toward the potential liability their new technologies
could incur if abused by purchasers, licensees, or sub-licensees.
Inevitably, technological progress would be impeded, as the potential for
technologies and product features that would benefit legitimate users. In
the long run, innovation -- and therefore society as a whole -- would
Of course, Hollywood hated the Sony Betamax ruling from its birth,
and now they are seeking a subtle way to make it walk the plank or at
least pull out all its teeth.
On March 29, the Supreme Court of the United States will hear arguments
on the Grokster case. That's not the official title, of course.
It's cited as
Metro-Goldwyn-Mayer Studios Inc., et al, v. Grokster, Ltd, et al.
You could just call it the Entire World v. P2P, though. The case was
begun in October 2001, brought by the largest entertainment companies in
the world, supported now by all their friends.
And I do mean all. There are now 19 separate amici briefs in
support of the music and movie industry's position, including one from Napster, of all things, as well as:
BMI, et al,
for Tax Reform,
- the National
Association of Broadcasters,
- the National
Association of Recording Merchandisers,
- the International
Federation of Musicians of the US and Canada, American Federation of Television and
Radio Artists, Directors Guild of America, Screen Actors Guild, and the
Writers Guild of America,
- the State
- the Commissioner
of Baseball, NBA, NFL,
Professional Photographers of America, and
- Kids First Coalition along with Christian Coalition of America,
and Concerned Women for America.
Even Senators Patrick Leahy and Orrin Hatch have filed a brief [PDF], contradicting the defendants'
statement, accepted by the judges, that it is up to Congress to change
Sony Betamax, not the courts. Not so, claim the Senators. "The
Court cannot refuse to fulfill its constitutional responsibility simply
because Congress may be working through possible legislation, that, even
if passed and signed into law by the President, may or may not address
the issue at hand," their brief contends. Of course, they already tried to
change the law, by introducing the INDUCE
Act, but they couldn't get it passed so far, so now they tell the
judge it's up to the Court to do what they failed to accomplish.
Why is this case so vital in the eyes of so many? Obviously, it's
about money and control. It's a lot easier for entertainment companies
to sue a gateway than to sue individual infringers who, they point out,
are likely judgment-proof anyway. "Judgment-proof" is legalese for
"this potential defendant isn't worth suing because he has no money,
and it would cost more in legal fees to win a judgment than we could
possibly collect, so let's find someone with deep pockets we can sue
instead." The RIAA tried kind of the same thing in the Verizon case, but the court there told
them they had to file against infringers one by one instead of going
It's also a debate between those who understand technology and those
who don't, as Edward Felten has pointed out in his analysis
of the brief filed by the Solicitor General [PDF]. The Internet is, after all,
when you think about it, a file sharing system itself. And the
entertainment industry doesn't like it one bit. It would like the
world to stop in its tracks and cling to the old, funneled way of
distributing information, whereas the world has found a system that is
easier, quicker and cheaper, and they want the better mousetrap.
And then, in the middle, is the more subtle and complex issue of how to
define and protect valid copyright rights in a digital age without
destroying fair use, innovation, and Constitutional rights of free
expression at the same time.
There are a block of amici
briefs that take neither side's position and want the Court to remand
the case to the district court and look at the matter with fresh eyes.
"Grokster's conduct in this case may well give rise to liability," says
Media et al's amici brief [PDF], but they add that while design
and manufacture is protected by Sony, conduct that actively
encourages users to infringe is not. Their hope is to leave Sony
Betamax intact, but look at whether the respondents crossed other
lines that could lead to them being found guilty of infringement on a
basis that won't topple Sony. EFF has all of the briefs
on its website.
Does Grokster stand a chance? Obviously, it would have been better
from the defendants' standpoint if the Supreme Court had not accepted
the case and had let the Ninth Circuit decision stand. On the other
hand, this case has resulted in some surprises before.
Back in April of 2003, when the district court in Los Angeles granted
partial summary judgment in favor of StreamCast and Grokster, the
entertainment industry was stunned. After knocking over Napster and
Aimster and all their cousins like so many lined-up dominoes, the
industry wasn't used to losing. And yet, here was a judge who said
that P2P software is capable of noninfringing uses, and so, relying on
Sony Betamax, the accused were not liable for users' copyright
Plaintiffs appealed to the Ninth Circuit Court of Appeals. The oral
arguments were riveting. At the conclusion, even one of the
three judges, the Hon. Sidney R. Thomas, who wrote the final opinion,
at the conclusion of the hearing told them, "Excellent arguments, and
the briefing has been superb." Judge Thomas hit the nail on the head.
The lawyering in this case has been admirable, and whatever happens, it
won't be because one side or the other dropped the ball.
The Ninth Circuit's decision [PDF] upheld the
lower court. Remember, this court is the very one that upheld the
Napster decision. Plaintiffs appealed again, and in December 2004 the
Supreme Court granted
certiorari. You don't just get to argue your case before the
Supreme Court at will. You must persuade them to let you.
And what about the respondents? Everyone else has had its
say, but their Supreme Court briefs will not be filed until March 1,
2005, along with amicus briefs in support. But we are not left
in the dark about their position, as we can read EFF's Brief in Opposition to the Petition for
Certiorari [PDF], the transcript of the oral arguments before
the Ninth Circuit, StreamCast's and Grokster's briefs [PDFs] to
the Ninth Circuit,
EFF attorney Fred von
Lohmann's Law.com article,
as well as my favorite, the Amicus Brief of 40 law professors [PDF].
For the time-challenged, EFF's Fred von Lohmann, who represents
StreamCast, calls the lawsuit "nothing less than a frontal attack on
the Betamax ruling":
The Betamax principle is simple:
so long as your product is capable of substantial noninfringing uses,
selling it will not put you on the hook for every infringement a
customer may commit with it. If copyright owners want a different rule
for any particular technology, they can go to Congress and ask . . .
According the entertainment industries, the Betamax defense "should not
apply when the primary or principal use of a product or service is
infringing" . . . They specifically reject the "mere capability" test
. . . that the majority of the Supreme Court endorsed in
Why does this distinction matter to innovators,
he asks? Because if "primary use" becomes the test, and it's "measured
from the point of view of Hollywood lawyers", innovators will have to
"stare down the lawyers before they ever reach the market." And it's
only if P2P file-sharing technology is allowed to continue to flourish
and mature, EFF argues, that will we ever find out what its ultimate
"primary use" may turn out to be.
The Sony Betamax decision, then, is the rock on which
Grokster's defense stands, and it is really the prospect that the rock
might crumble that will have multitudes flocking to the Supreme
Court in March, either salivating at the prospect or in real dismay. 2
When should the
distributor of a multi-purpose tool be held liable for the
infringements that may be committed by end-users of the tool? That is
the question before the Supreme Court. Edward Felten puts
The biggest issue in the Grokster
case is whether the Supreme Court adjusts or clarifies its precedent
from the Sony Betamax case. The fate of Grokster itself is much
less important than what ground rules the Court imposes on future
The Supreme Court's visitors' guide opens
with these words:
A case selected for argument usually
involves interpretations of the U. S. Constitution or federal law. At
least four Justices have selected the case as being of such importance
that the Supreme Court must resolve the legal issues.
In the case of Grokster, that is not hyperbole.
1 Fred von Lohmann explains
that the sole expert, upon whom plaintiffs' rely, found that
15% of P2P contented sampled on one occasion by the expert "consist of
commercially released sound recordings..., compositions, videos, and
the like" not owned or controlled by Plaintiff companies.
-10% were either unidentifiable, or "snippets of software, a picture of
Bob Marley playing soccer and a document concerning someone's
"The declarant then **assumed** that the 15% was 'very likely
infringing.' No basis was given for this, and there is no evidence
that they bothered to track down and ask any of these rightsholders if
they minded P2P sharing among fans.
Included among the 15% are live concert recordings from Phish, the
Grateful Dead, DJ Logic, and Bela Fleck, all of whom have authorized
noncommercial sharing of live recordings (DJ Logic and Bela Fleck, in
fact, are part of the Internet Archive's Live Music Archive). Also
included are independent artists who (assuming they still control their
own rights) may not object to noncommercial sharing among fans,
including Wilco, Tenacious D (who authorizes sharing of live
recordings), Ani Difranco, White Stripes, Kid Koala and Moby.
"There's no evidence that any of the rightsholders in the 15% were ever
asked. Instead, Petitioners simply presumed to speak for all
rightsholders, asserting that all copyright owners view noncommercial
sharing by fans the same way they do.
"So I think 75% is where the **real** numbers begin on this record
(with the renewed note that it should have been even lower, but for
flaws in building the sample)."
2It is possible
to attend the Supreme Court hearings, by the way, if you get on line
early enough. It's first-come, first-serve, with the line forming in
the Front Plaza, and seating is limited. Here's a visitors' guide [PDF]
that explains what you will see and what is expected of visitors. In
this case, I doubt you will get in, given the intense interest in the
case, but who knows? But be aware, if you try to attend, that there
are two lines: one for those wishing to listen to everything, and one
for a 3-minute walk-through, so look for the signs. Seating for the
morning session begins at 9:30, with arguments to begin at 10 AM, but
plan to get there a lot earlier than that. There is, of course, a
security checkpoint. But the hearings will be transcribed and
probably there will eventually be video available as well in time.
You can find audio files of Supreme Court hearings on the Oyez Project's US Supreme
Court Multimedia Database. When the transcript is done, you'll
find it on this
Supreme Court web page. A ruling in the Grokster case
won't issue until July. Here's a guide to Supreme
Court research, in case you've gotten hooked.
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