The Supremes Dance their Way to a Narrow Decision

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The Supremes Dance their Way to a Narrow Decision

6/29/2005

By Terry Calhoun

REFLECTING ON THIS WEEK'S SUPREME COURT RULING ON P2P FILE SHARING NETWORKS, OUR COLUMNIST FINDS LITTLE TO WORRY ABOUT

What happened? Reports from those who monitor file sharing indicate that Internet traffic was indistinguishable Monday, Tuesday, and Wednesday from the previous week, so consumer behavior is unchanged. Grokster and StreamCast owners, staff, and investors are in a world of hurt, of course, and lawyers have a new way to earn their hourly fees. Many of us are relieved that the decision was narrow enough to not affect the technology (software and hardware) of file-sharing, just the marketing and the business plans of those who provide services based on it.

I think that lawyers are the real winners, here, but then that’s often the case at the end of any legal action.

Actually, I didn’t for a moment think that the Court would let Grokster off the hook. The case is heading back to trial now, and I don’t think it’ll be terribly difficult to prove that Grokster’s initial business model was one that encouraged copyright violators. D'es anyone really doubt that Grokster took “affirmative steps taken to foster infringement?”

But the Court did a fairly good job of protecting everyone else. I was terribly worried that their decision might overturn the decades-old Sony v. Universal City Studios decision of (the Betamax Case) and allow liability due simply to technology alone. But it did not do that. Technology by itself still cannot be the basis for a copyright suit, so technology innovators can go right ahead and keep working on those matter duplicators.

The decision d'es allow for some chilling effect on the innovative folks who come up with new file-sharing technologies, because now they can expect an increased likelihood that somewhere, they’ll face a lawsuit wherein they’ll have to defend their business model.

It’s sort of like ATM machine placement. Really. Take a look at my snapshot below.

The three young ladies walking from left to right, have just passed an ATM machine. You can see from the signage and street markings that machine is located about a hundred feet from the center of a major Ann Arbor intersection – near the famous Blue Front store. Years ago, when that machine went in I thought to myself, “What are they thinking? Don’t they know that by placing that there it will encourage people to illegally park in a traffic lane for the duration of their ATM transaction?”

And of course, that d'es happen - many times a day.

Should the bank who owns the ATM machine be liable for the disruption of traffic? Or for injuries received by anyone involved in an accident that might be caused by someone illegally parking there to use the machine?

If we applied the principle of the MGM v. Grokster decision, if the bank were to be sued then it may have to defend itself and somehow prove that it didn’t actually intend for people to park and use that machine; that there was no inherent assumption in its business model that assumed a certain percentage of users would find that illegal parking spot to be quite handy for using that machine.