MGM vs Grokster

The US Supreme Court heard oral arguments in the MGM vs Grokster case today. For those living under a rock, at issue is the legal decision that prevented the movie industry from killing the VCR in the mid-80s (the “Sony-Betamax decision”). In retrospect the Supreme Court did them a big favour since most of the movie industry’s revenue now comes from video rentals. Unfortunately the movie industry has not learned its lesson.

“Secondary copyright infringement” is when you yourself don’t actually infringe copyright, but you somehow facilitate someone else doing it. I assume that this was originally intended as a way to get at the people that run “swap meets” where people exchange copies of software and CDs in violation of copyright law.

In the 1980s the Supreme Court said that the creator of a technology cannot be sued for secondary infringement if their technology is “capable of substantial non-infringing use”, in effect creating a “shield” against secondary liability for technology creators. In the case of Grokster, two previous court judgements have said that this doctrine protects decentralised P2P software, in the same way that it shielded the creator of the VCR. The movie industry would like to see this shield weakened enough that Grokster and similar P2P file-sharing networks are no-longer protected by it.

Their opponents (myself included) fear that any weakening of this shield will create exactly the kind of legal uncertainty that can kill innovations before they have even made it out of the venture capitalist’s office (and as a veteran of a number of VC’s offices, I can attest to the fact that nothing turns them off like the threat of a legal battle).

If you don’t mind Real Video, you can watch a great debate between Fred von Lohmann, Senior Staff Attorney for the Electronic Frontier Foundation, and Theodore Olson, Former Solicitor General for the Bush Administration (2001-2004) and Representative of the Recording Industry and Motion Pictures Association here.

The argument only took place a few hours ago, but you can read a good summary from someone that appears to know their stuff here. His assessment? It went better for Grokster than he expected, but it is extremely dangerous to draw any conclusions from the oral argument phase of a court case.

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