MGM v Grokster Day 1

By Richard Menta 3/30/05

When I look at the picture of the annonymous woman at the right I wonder if her future means one where the record industry wins or where the file swap companies do? The instrument in her hand suggests she is not a platinum recording artist and therefore more prone to support the file share programs as a self-promotional vehicle for herself. Then again, maybe not.

But I was quite happy to see all of the photos of demonstrators on both sides of the argument. This case has become very visible and that spurs debate both in and out of the Supreme Court building. Debate is critical as too many people seem to focus on absolutes rather than the shades of gray that mark this conflict.

Day one shows that the justices are likewise taking a hard look at this case trying to find equilibrium from both sides. They are also cutting neither side slack.

The justices showed significant concern that innovation could seriously be hampered by the media industries proposal. Several of the justices pointed questions to the entertainment laywers that showed this concern ran deep.


Pro file swapping or against?

Justice Stephen Breyer noted that at the time of their release the MP3 player, the Xerox machine, and Gutenberg's press all had "vast numbers of infringing uses that would be foreseeable".

"What I worry about is a suit that comes right out of the box" said conservative Justice Antonin Scalia. His questions showed it troubled him to give too much power to copyright holders to sue as abuse could chill positive progress.

The justices know all to well that the wealth and influence of this country was built on progress. With the asian economies agressively keeping up with us in technology, the national competitive advantage we held matter-of-factly in the 20th century is shifting partially overseas. Supressed innovation can hurt this country.

"The Supreme Court asked exactly the right question: How do we preserve innovation?" Fred von Lohmann told CNET. Lohmann is the Electronic Frontier Foundation attorney who represents StreamCast Networks. "How do we protect the innovator in a garage who's inventing the next iPod?"

But the justices were likewise critical of the activities of the file sharing companies. Again, they were looking past the absolutes.

Justice Anthony Kennedy said that allowing companies to ignore the potential for copyright infringement equals "unlawful expropriation of property as a kind of start-up capital".

Justice Scalia pointed out that Grokster's more-decentralized method of downloading had been developed "solely to get around" the Napster ruling.

The justices also asked several questions that probed for alternate ways that the file swap companies can be held responsible for the protection of copyrighted material. It is possible that at the end of the trial, whichever way it goes, the case can be sent back to a lower court to define parameters as to the involvement of file sharing technology with regards to this issue. In other words, they may not be allowed to continue to create applications that allow them to remain intentionally blind to how their products are used.

Several of the justices expressed frustration on the lack of information that can accurately describe the magnitude of copyright infringment in the case. This works against the entertainment industries who are claiming massive losses without solid proof.

For example, the movie industry has experienced no loss of revenue at all, setting record box office and DVD sales each of the last several years. The RIAA represented record companies have shown losses and blame all of it on file trading without isolating it from other potential causes. Many non-RIAA represented independent labels have shown an increase in sales, citing file sharing as a promotional tool for their artists.

Stay tuned.

 


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