Earlier today the United States Supreme Court unanimously ruled in favor of Hollywood ruling that producers of software can be held liable for infringing uses of users of the software. The key to the ruling is that the companies producing the software must be marketing it for that specific purpose. The court largely dodged the issue of the technology itself focusing instead on the intent of the producers when it came to marketing the software. As a result MGM. et al v. Grokster will be sent back to a lower court to determine if Grokster and Streamcast did indeed induce copyright infringement.
When I first heard of the decision a few hours ago, I was ready to jump in full throttle and lambast the decision. First, though, I thought I might want to read the full decision before I formed an opinion. After a few readings, I haven’t decided if it’s exceptionally vague, well balanced and fair or both. I’m leaning toward both. It appears to raise more questions than it answers.
From the ruling…
“One infringes contributorily by intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting from direct infringement while declining to exercise the right to stop or limit it.”
That sounds pretty fair to me. Distribute something and promote it to break the law and you will be liable. The vague part is, I haven’t found a standard for which “intentionally inducing or encouraging direct infringement” could be applied. It looks like potentially every new tool introduced could be litigated against in order to determine if the distribution was contributory.
Further adding to the already murky water.. (emphasis mine)
“On the record presented, respondents’ unlawful objective is unmistakable. The classic instance of inducement is by advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations. MGM argues persuasively that such a message is shown here. Three features of the evidence of intent are particularly notable. First, each of the respondents showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users. Respondents’ efforts to supply services to former Napster users indicate a principal, if not exclusive, intent to bring about infringement. Second, neither respondent attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software. While the Ninth Circuit treated that failure as irrelevant because respondents lacked an independent duty to monitor their users’ activity, this evidence underscores their intentional facilitation of their users’ infringement.”
While Napster users were found to be infringing, the primary motivation of Napster users was to listen to music. Stating that marketing to Napster users in and of itself was an indication of contributory infringement is quite a jump. If Apple were to market iTunes to former Napster (or even Grokster) users would they too be liable even though Apple runs a legal service?
A second and potentially more scary point is that they seem to be saying that if you provide an otherwise legal service and a copyright holder has an issue with people using that service that it is up to the service provider to insure that the service is changed to put the onus of enforcement on an otherwise lawful provider. Let’s say one gets a copy of a CD from a friend and rips it into iTunes. Is it then Apple’s responsibility to make sure the software will filter or not play those products? I say this because there is no doubt a mountain of content loaded into iTunes or on iPods that was derived from file sharing. I’d suspect more than have been purchased from the iTunes Music Store.
Added on Edit: The first reads I did were from the sylabus of the decision. I since got a pdf of the entire ruling where there is a footnote that reads..
“Of course in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on the failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses.”
That’s somewhat comforting, though given the voracity of the plantiffs in pursuing these sorts of cases this could likely be more than a small bump in the road for those that wish to litigate such devices from existence regardless of any other applications.
What’s happened here is that the market and the distribution paradigm have evolved and the content producers weren’t able to exploit it like they have in similar transistions in the industry. For example, vinyl LP to cassette to CD in the music biz and video cassette to DVD in the movie biz. Instead of changing tactics and trying to drive new business models, content producers chose to litigate and force consumers into models they no longer wished to use.
“We will no longer have to compete with thieves in the night whose businesses are built on larceny,” said Andrew Lack, chief executive for Sony BMG Music Entertainment.
Nope, you’re left competing with the same thieves you’ve always been competing with. All the other labels…
