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A Brief Overview of the Grokster Decision

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I’m not a legal expert by any means, but I have been following this case very closely, and I’m writing a research paper on it. At the end of the day, I think the ruling is essentially fair, although what it will mean for technology manufacturers is still somewhat unclear.

A brief overview of the Grokster decision

In my view, the Justices did what they had to do: they had to attempt to draw some kind of line in the sand between Grokster/Morpheus-type software companies, which are organized around profiting from massive copyright infringement, and the wide range of other companies whose products could conceivably make them contributorily liable for infringement under a broad ruling (such as iPods, cd burners, etc.).

The Court’s problem? How to draw this line without throwing out the Betamax standard (from the 1984 Sony v. Universal, or Betamax, case). The Betamax standard can be restated as follows: a company is not liable for creating a technology that some customers may use for copyright infringing purposes, so long as the technology is capable of substantial non-infringing uses (paraphrased from EFF.org’s Betamax page).

However, “substantial non-infringing uses” were not as . . . substantial a factor as in the Grokster decision as many observers thought they would be. The Supreme Court held that the Ninth Circuit Court of Appeals misread the Sony v. Universal (or Betamax) doctrine (and I’m quoting the Grokster decision’s syllabus here) “to mean that when a product is capable of substantial lawful use, the producer cannot be held contributorily liable for third parties’ infringing use of it, even when an actual purpose to cause infringing use is shown, unless the distributors had specific knowledge of infringement at a time when they contributed to the infringement and failed to act upon that information. Sony did not displace other secondary liability theories.”

In other words, the Supreme Court held that the mere existence of substantial non-infringing uses of a technology does not act as a prophylactic against all contributory liability claims against the manufacturer. The Court emphasized the intent of Grokster and Streamcast (the company that runs the Morpheus P2P network) – to make money by inducing copyright infringement – and much of the opinion is dedicated to underscoring 1) the companies’ advertising of their products as avenues for infringement, and 2) their business models, which rely on selling advertising space to profit off of massive infringement. Thus, while Grokster, LTD. has shown the kind of intent necessary to facilitate a contributory liability claim under the holding, someone like Bram Cohen, the computer genius who created the BitTorrent network (which is far-technologically-superior, and much more popular) and distributed it for free, probably has not.

The Washington Post held a live chat Monday with Gigi Sohn, an attorney from Public Knowledge, a consumer-oriented technology think tank. The following is the question I submitted, with Sohn’s response:

* * * * *

Queens, N.Y.: The Court seemed to put a lot of emphasis on Grokster’s intent, such as their use of advertising promoting themselves as the next Napster, and their knowledge of the kind of infringement that was going on, shown in emails from executives to users. If intent is that important, would BitTorrent, which was created by a computer geek/genius, and distributed free, be viewed in a completely different light?

Gigi Sohn: I would think so. BitTorrent does not appear to engage in any of the same conduct that concerned the Court in this case. I also think the fact that Grokster and Morpheus sell advertising is another important distinction. Obviously, this distinction has not stopped Hollywood from going after BitTorrent tracker sites, but I think that Bram Cohen (BitTorrent’s creator) is probably safe.

* * * * *

As Sohn says, a BitTorrent would probably be in the clear with regards to advertising the software as an avenue for infringement, as well as the business model element of the Court’s intent discussion. But there is a third prong of the Court’s intent test that is worrisome. The Court held that the fact that “neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software” was evidence of “unlawful objective” on the part of Grokster and Streamcast.

Would BitTorrent’s lack of “filtering tools or other mechanisms,” combined with evidence of extensive infringement carried out using BitTorrent, be enough for contributory liability to be extended to BitTorrent? I doubt it, because the Court puts so much emphasis on the “advertising/promotion” and “business model” elements. Princeton Computer Science professor Ed Felton takes on this issue in his post, “BitTorrent: The Next Main Event.” In a Salon.com article, Siva Vaidhyanathan ponders whether even a search engine like Google could be held contributorily liable under Grokster.

Moreover, many tech experts are concerned about the unclear nature of the ruling, and the potential for strike suits by Hollywood against manufacturers of new technology – which could chill innovation by forcing manufacturers to fight in court or settle out of court. Cory Doctorow (of BoingBoing.net) makes the slippery slope argument in his editorial for Popular Science, “Supreme Court Strikes a Blow against P2P Sharing.”

While the potential chill on technology companies is a serious issue, I thought it was unrealistic to think that the Supreme Court was going to rule in favor of Grokster and Morpheus. Maybe it’s because I was going in with that as a baseline assumption, but I don’t think that the outcome of the Grokster decision is a doomsday scenario for P2P and similar technologies. Grokster and Morpheus are fairly extreme examples, and depending on how the Ninth Circuit Court of Appeals and other courts interpret the decision, Grokster‘s holding could be a lot narrower than some people are fearing.

So what happened to the Betamax standard?

Although the Court’s opinion downplays substantial non-infringing uses of P2P, it doesn’t throw out the Betamax standard – rather, the Court is just saying that Betamax isn’t completely bulletproof, if there is overwhelming evidence that your software has an unlawful objective.

The concurrences which follow the Court’s opinion show how the Justices are split over the future of the Betamax standard. Justice Breyer’s concurrence, which was joined by Justices Stevens and O’Connor, stresses the significant role that the Betamax standard plays in promoting innovation, and lists several good examples of non-infringing uses of P2P, including Project Gutenburg (which puts electronic books online), and Wilco’s use of P2P to promote their successful album “Yankee Hotel Foxtrot.”

I hope that Breyer’s concurrence (which is attached to the end of the decision) will be looked to for clarification as courts interpret the Grokster decision, rather than Ginsburg’s. Ginsburg, joined by Chief Justice Rehnquist and Justice Kennedy, downplays the substantial non-infringing uses of P2P networks, and, as Breyer puts it, seems to advocate that the Court “interpret Sony more strictly.” Perhaps the most astute, and most exciting, part of Breyer’s concurrence is his discussion of the “flow” of new technologies towards non-infringing uses, which recognizes the fact that the initial use of a technology is often only one of its many eventual uses, which are increasingly developed by consumers themselves.

For a wide range of commentary about Grokster, go to Ernest Miller’s Day After Grokster Roundup on Corante. Miller is a real expert on technology law, and was part of the Wall Street Journal’s Roundtable discussion on Grokster.

Distribution of government documents via P2P

As a footnote, a smaller aspect of the case I was interested in was whether there would be any mention of people using P2P to distribute government documents. The Grokster opinion’s only reference to people downloading government documents over P2P was a somewhat sarcastic comment from Justice Souter, during a passage in which he is downplaying noninfringing uses of P2P. “Indeed, StreamCast has given Morpheus users the opportunity to download the briefs in this very case, though their popularity has not been quantified.”

I didn’t realize that Morpheus had put the briefs on their network, and can’t speak for them – but since I put a torrent of the Grokster briefs on the BitTorrent network on March 27th, 340 people have downloaded it, totaling over 750,000 pages downloaded. While that’s obviously small potatoes compared to the amount of copyrighted music downloaded, it’s unfortunate to see P2P distribution of government documents mocked as if it is an empty gesture (especially as someone who’s had a noisy Gateway 2000 computer running 24 hours a day in his apartment, for the last year, solely to facilitate that).

So here’s more quantification, just for the record. In the 48 hours after I put the Grokster decision on the BitTorrent network, 523 people have downloaded the torrent, totaling over 28,000 pages downloaded. Over 1,624 people have downloaded the 181 MB “Return of the Fallen” torrent of Pentagon photos, representing 293 gigs of data transmitted. Another 1,300 people have downloaded the torrent of World War II documents, and another 630 have downloaded the torrent of American Revolution documents. All told, during the three-month period from March 27 to June 27, the total number of pages of documents downloaded from outragedmoderates.org via P2P was just over 3,000,000, along with several hundred hours of audio files (the Betamax oral arguments and Deep Throat’s phone call with Nixon).

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  • http://www.cybersheet.com/google.html Ray Gordon

    My URL links to my current lawsuit against Google for exactly what Grokster was sued for: profiting from mass copyright infringement.

    Perfect 10 has also sued Google along similar lines.

  • http://www.outragedmoderates.org Thad Anderson

    Interesting, although I’m a big Google fan, so I’m not sure what to make of the suit.

    I will say that, when I do a Google search for my site (which doesn’t get that much traffic, compared to big blogs), I’m shocked that you eventually find the name being used by German po*n sites to get traffic.

  • Ray

    Did you type the URL of the german porn site into your browser to see if it shows up on the original page?

    Then you could point the host to it and ask how you wound up linked.

  • Ray

    Would you be a “big google fan” if it were your name being dragged through the mud by those who had an axe to grind against you, knowing full well that the search engines would do 99 percent of the damage that you couldn’t possibly do on your own?