Franki reported on the MGM v Grokster case (official opinion on the Court’s website in pdf format) just decided by the Supreme Court. In that Opinion, the Supreme Court of the United States ruled that peer-to-peer networks may be responsible for the illegal file sharing committed by users of the network if they intentionally encourage the sharing of copyrighted information. The specific language on the very first page of Justice Souter’s opinion for the Court says:

…”one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

Franki’s article has been criticized as “over the top” by a commentor for suggesting that this will shut down p2p services. One can certainly argue about the relative effects of the decision, but as the writer pointed out — and our prior article did NOT suggest to be the case — the decision did not address peer-to-peer sharing of non-copyrighted material by any stretch. The issue is, will peer-to-peer sharing be a successful business model absent the number of users there only for copyrighted material. The answer to that is unknown.

If you really want to be informed, don’t take our — or anyone elses – word for what the ruling means! Read it yourself on the Supreme Court site. But do not stop there, take the time to read the transcript of the hearing back in March to see the arguments made. (As an aside, I am amazed at the number of times the counsel for the Petitioner interrupted the Justices.) Anyway, the case presented these p2p networks as 90 illigitamate. If you take away 90 percent of the advertising revenue, would the system still make sense? Time will tell.

We are also criticized for Franki’s suggestion that this decision “essentially” overturns the Sony/Betamax case. I think a better phrase would be that the Supreme Court clarified the application of the Sony Case. They did overturn the Ninth Circuit Court’s interpretation of the Sony ruling. (See opinion at page 16-17). The question under Sony was, is the mere selling of a product that could be used to copy content illegally sufficient cause for to hold the seller liable for the users transgressions. In the Sony case the court ruled that because there were many legitimate uses (example time shifting of programs legally copied for personal use) and no data to suggest a significant misuse, Sony could not be held responsible for possible illegal use by consumers. Had Sony also run a network to encourage the persons who illegally taped a program to exchange or replicate them over and over, that decision would have been different. Sony was misread by many, including the Ninth Circuit as permitting distribution of a product without liability for users trangressions so long as there was any legitimate use of the product that did not involve infrigement. The court clarified what was meant and overturned that reading or interpretation followed by the Ninth Circuit. Does that constitute an overturn of the decision? Not in the truest of senses, … hence Franki’s use of the word essentially … because it upset the reading many applied to the prior decision.

This article was posted on Wednesday, June 29th, 2005 at 2:20 am