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hubner
2005-06-27, 09:25
Decision in Grokster today.

http://www.washingtonpost.com/wp-dyn/content/article/2005/06/27/AR2005062700471.html?referrer=email


Court: File-Sharing Services May Be Sued

By HOPE YEN
The Associated Press
Monday, June 27, 2005; 12:08 PM


WASHINGTON -- 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 behavior, 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.




--

Steven Moore
2005-06-27, 10:29
Since the file sharing companies are being held responsible for what
people do with their computers then
the gun companies will now be sued for all the woundings and killings
by idiots with guns.
The car companies for people killed in accidents etc or will they...

Steven Moore
On 27 Jun 2005, at 17:25, Johan Hübner wrote:

> "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.

Aaron Zinck
2005-06-27, 11:00
> "Steven Moore" wrote in message
> Since the file sharing companies are being held responsible for what
> people do with their computers then
> the gun companies will now be sued for all the woundings and killings
> by idiots with guns.
> The car companies for people killed in accidents etc or will they...


While I'm not sure where I stand on this and am certainly a big fan of
personal responsibility one must allow that there's a difference between the
situations you present and the Grokster case. One can hardly argue that the
primary use of guns (in the US) is to illegally kill people, and neither is
the primary use of cars to kill people in accidents. There are substantial
legal ways that both those items can be used...and indeed are primarily used
in legal ways. I would be all over going after gun or car companies if they
ever advertised "buy our guns...they're great for hold-ups" or "our cars are
excellent for going out and getting into wrecks and killing other people";
which is similar to what Grokster did: they marketed their software as being
good for breaking the law, and indeed their software was primarily used to
break the law.

Again, I'm not sure where I stand on this because it's a complicated
situation, but I just want to resist simplifying it too much as it's really
not like guns or cars--in fact, it seems unlike anything that has come
before it.

seanadams
2005-06-27, 11:16
Still reading the decision. Initial reaction: this isn't a big deal -
they cited common law and kicked it back down. It may actually be a
positive thing for p2p - they have narrowed the liability question to
simply how Grokster was marketed. MGM needs to show that they were
promoting it for illegal purposes. If some other p2p network were
more careful than Grokster was in that respect, they'd still be safe
per Betamax. It's the same as:

OK to market bullets for "killing", not "murder"
OK to market glass pipes for "smoking", not "smoking pot"

Full decision is here BTW:

http://www.eff.org/IP/P2P/MGM_v_Grokster/04-480.pdf

Jeff52
2005-06-27, 12:13
Hi Sean,

I agree and from what I see in the opinion the court really did not set forth a definitive standard regarding vicarious liability for copyright infringement and deliberately refused to overrule or modify the "Sony" test. However, most commentators agree that Grokster and StreamCast utilized a poor business model in specifically marketing and aiming its product as a great way to obtain copyrighted material without paying for it. However, the opinion is replete with references to the defendants advertisements and emails (both very damaging) so they may ultimately face some liability issues. As the court noted: "There is substantial evidence in MGM's favor on all elements of inducement..."

As an aside, I assume "Modest Mouse" enjoyed the reference to themselves in the opinion.