Grokster File-Sharing Case Hits The Supreme Court

[KingLouieLouie]

http://www.mtv.com/news/articles/1499297/20050330/index.jhtml?headlines=true

Grokster File-Sharing Case Hits The Supreme Court
03.30.2005 5:36 PM EST

High court argues over whether file-sharing services set out to infringe.

The Supreme Court heard arguments Tuesday from representatives of major film studios and the recording industry who are seeking to shut down peer-to-peer services they say are costing them billions of dollars.

One of the questions the court kept coming back to was this: What's more important — preventing potential copyright violations or allowing the market to come up with innovative new products?

The case began when MGM and several record labels filed suit against StreamCast Networks and file-sharing network Grokster, arguing that they were intentionally created to allow people to illegally trade copyrighted material. That case was thrown out by a circuit court in August, paving the way for it to be argued in front of the Supreme Court.

"The scale of the whole thing is mind-boggling," argued recording industry lawyer Donald Verrilli. "They intentionally built a network of infringing users."

This case is different from the one that brought down file-sharing pioneer Napster in 2001 because, unlike that renegade service, Grokster doesn't have a central directory that helps people swap files, but instead merely provides the software for them to swap whatever files they choose.

Justice Stephen Breyer said that distinction makes the services a different animal entirely, and he compared it to the good and bad uses that have plagued every invention dating back to the printing press. "There are, conceptually anyway, really excellent uses of this thing," Breyer said.

During the hour-long debate, the justices also questioned whether other devices that can potentially be used to make illegal copies — such as photocopiers, VCRs or MP3 devices — would exist if lawsuits had been leveled against their inventors. Justice Antonin Scalia worried that innovators might be convinced, "I'm a new inventor, I'm going to get sued right away."

The justices argued that limiting the ability of new technologies like those used by Grokster could harm the creation of important new products like Apple's wildly popular iPod. But Verrilli quickly put some space between Grokster and the iPod, by arguing, "From the moment that device was introduced, it was obvious that there were very significant lawful commercial uses for it."

Verrilli asked the justices to consider the question of how to gauge whether companies such as Grokster and StreamCast have built their businesses on helping their users illegally trade copyrighted material.

Harold Feld of the nonprofit public-interest law firm the Media Access Project attended the hearing and said it was not clear how the justices felt about the services.

"The justices didn't appear to be happy about what the movie and recording industries were asking for," said Feld. "They're asking for a rule [requiring that] a substantial amount of the technology is not infringing, [and] if it is mostly used for infringing, then the company should be held liable. But in [a 1984 case involving Sony and VCRs] the Supreme Court said that if you have a technology that is capable of infringing and noninfringing uses, then you can't hold the maker of the technology liable for the infringing use."

Grokster lawyer Richard Taranto argued that they have "growing legitimate uses" and that hundreds of thousands of files that are not subject to copyright are available for trading on them.

Justice Anthony M. Kennedy seemed unimpressed, and asked Taranto whether it is right to use money generated by selling stolen property to help finance an emerging technology. "That seems wrong to me," Kennedy said.

A spokesperson for Grokster would not comment on the proceedings. A ruling on the case is expected by late June.

For complete digital music coverage, check out the Digital Music Reports.

— Gil Kaufman

Side-Note: I'm currently working on a term-paper which pertains to my support of file-sharing and I'm wondering to what other's perspectives are on this rather controversial issue.....

Here's a poll:
Support Grokster?
Support The Record Labels?
Indifferent?

Any feedback would be vastly appreciated....

 

[Ryanwb]

In my opinion, sueing the filesharing company is like sueing a gun manufacturer if the gun is used to commit a crime. The end user of the tool is ultimately the guilty party in the transaction, you can hold the parent company at fault.


Grokster has a legitimate purpose, to share files. There is no reason that they can be held liable because the end users shared 'illegal' files

 

[vince56]

Ryan, have you ever shared a legal file on a file sharing network?

 

[Ryanwb]

Ryan, have you ever shared a legal file on a file sharing network?

I am in IT so yes, I do all the time with geeks around the world.... but I am probably in the small majority.

Also I believe amateur porn is legal to freely distribute so I am totally guilty there

 

[jerryp]

I am in IT so yes, I do all the time with geeks around the world.... but I am probably in the small majority.

Also I believe amateur porn is legal to freely distribute so I am totally guilty there

If you're in IT why don't you use a real file sharing protocol?

 

[Ryanwb]

If you're in IT why don't you use a real file sharing protocol?

What do you mean?

The question was, "Ryan, have you ever shared a legal file on a file sharing network?"

I responded yes

I'm not opening up my router to FTP, I use Bittorrent or something of that nature

 

[jerryp]

I thought your answer was in the sense that you needed to get a particular file to a particular user or machine, not in the sense that you just want to share stuff for the fun of it. If it were the former I'd just scp the file and be done with it.

 

[KingLouieLouie]

Too livid to really express my opinion on the decision that was rendered today!

http://jam.canoe.ca/Music/2005/06/27/1107189-ap.html

U.S. Court: File-sharing sites may be sued
By HOPE YEN

WASHINGTON (AP) -- Internet file-sharing services will be held responsible if they intend for their customers to use software primarily to swap songs and movies illegally, the Supreme Court ruled Monday, rejecting warnings that the lawsuits will stunt growth of cool tech gadgets such as the next iPod.

The unanimous decision sends the case back to lower court, which had ruled in favor of file-sharing services Grokster Ltd. and StreamCast Networks Inc. on the grounds that the companies couldn't be sued. The justices said there was enough evidence of unlawful intent for the case to go to trial.

File-sharing services shouldn't get a free pass on bad behaviour, justices said.

"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," Justice David H. Souter wrote for the court.

At issue was whether the file-sharing services should be held liable even if they have no direct control over what millions of online users are doing with the software they provide for free. As much as 90 percent of songs and movies copied on the file-sharing networks are downloaded illegally, according to music industry filings.

The entertainment industry said it needed protection against the billions of dollars in revenue they lose to illegal swapping. Consumer groups worried that expanded liability will stifle the technology revolution of the last two decades that brought video cassette recorders, MP3 players and Apple's iPod.

Companies will have to pay music and movie artists for up to billions in losses if they are found to have promoted illegal downloading.

Two lower courts previously sided with Grokster without holding a trial. They each based their decisions on the 1984 Supreme Court ruling that Sony Corp. could not be sued over consumers who used its VCRs to make illegal copies of movies.

The lower courts reasoned that, like VCRs, the file-sharing software can be used for "substantial" legal purposes, such as giving away free songs, free software or government documents. They also said the file-sharing services were not legally responsible because they don't have central servers pointing users to copyright material.

But in Monday's ruling, Souter said lower courts could find the file-sharing services responsible by examining factors such as how companies marketed the product or whether they took easily available steps to reduce infringing uses.

"There is substantial evidence in MGM's favor on all elements of inducement," Souter wrote.

In the closely watched case, supporting the effort to sue the companies were dozens of entertainment industry companies, including musicians Don Henley, Sheryl Crow and the Dixie Chicks, as well as attorneys general in 40 states.

About 20 independent recording artists, including musician and producer Brian Eno, rockers Heart and rapper-activist Chuck D, supported the file-sharing technology to allow for greater distribution of their works.

Monday's ruling gives the entertainment industry another legal option to the more costly and less popular route of going directly after millions of online file-swappers believed to distribute songs and movies illegally.

It's unclear how much the decision will actually deter the widespread problem of piracy since software programs created abroad won't be subject to the tougher U.S. copyright laws. Still, analysts say the court's stern rebuke should provide a boost to many file-sharing services that offer legal downloading for a fee.

Industry observers have said a ruling against Grokster could also prompt stiffer enforcement from European regulators, who were watching the case for guidance on tackling copyright questions in their countries.

Recording companies in the United States have already sued thousands of individual users; at least 600 of the cases were eventually settled for roughly $3,000 each.

The case is Metro-Goldwyn-Mayer Studios v. Grokster, 04-480.

 

[KingLouieLouie]

Backlash from the decision:

http://www.mtv.com/news/articles/1504993/20050630/index.jhtml?headlines=true

RIAA Sues 784 For File-Sharing, Gives Props To Supreme Court Ruling
06.30.2005 8:10 AM EDT

Users of peer-to-peer services Kazaa, LimeWire and Grokster targeted.
Demonstrators gather during RIAA court hearings (file)
Photo: Nicholas Kamm/Getty Images
Citing Monday's Supreme Court ruling as a "shot in the arm" in the fight against illegal file-sharing, the Recording Industry Association of America announced another round of lawsuits on Wednesday, this one naming 784 users of peer-to-peer networks.

According to the RIAA, the copyright-infringement suits filed in district courts from California to New York targeted users sharing files on P2P services including Kazaa, LimeWire and Grokster.

"On Monday, the Supreme Court provided a real shot in the arm to legitimate online music services and unanimously injected moral clarity into this debate," said Mitch Bainwol, Chairman of the RIAA in a statement, referring to the court's ruling on Monday that cleared the way for P2P companies such as Grokster to be sued if their users engage in illegal trading of copywritten material (see "File-Sharing Networks Can Be Liable For Copyright Infringements, Supreme Court Rules").

"If there was any doubt left, there should now be none — individuals who download music without permission are breaking the law. Our efforts to defend the rights of record labels, musicians, songwriters and others in the music community from theft will certainly continue and likely be strengthened in the weeks and months ahead."

Bainwol also gave props to the launch of a pair of new educational initiatives from Music United, a music-industry coalition formed to help parents understand how to keep their children safe when downloading music. Among the new programs is a worldwide campaign led by Childnet International to distribute a pamphlet for parents entitled, "Young People, Music and the Internet — a guide for parents about P2P, file-sharing and downloading." The pamphlet is available at musicunited.org and will be distributed in 18 countries by Childnet, an international non-profit aimed at making the Internet safer for children.

"At a time when national attention is drawn to the issue of music theft, more than ever before, we as an industry have a unique opportunity to educate our fans and the public at large of the consequences of illegal downloading," said Rick Carnes, President of the Songwriters Guild of America and Chairman of the Coalition's Communication Subcommittee in a statement. "As a coalition we are delighted to take this message 'to the street' nationwide and to dinner-table conversations between parents and their kids across the globe."

Along with the pamphlet, Music United has launched an outdoor ad campaign in 11 major cities with the tagline "Feed a Musician, Download Legally."

For complete digital music coverage, check out the Digital Music Reports.

— Gil Kaufman