Grokking Grokster

by Quinn Norton

On June 27, the Supreme Court vacated the decision of the Ninth Circuit Court, and remanded the case of MGM v. Grokster back to them. This they did unanimously, based on the opinion that the Ninth Circuit had misinterpreted the Universal Studios v. Sony "Betamax" decision of 1983. That decision said that as long as technology (in that case VCRs) had a substantial noninfringing use, their makers couldn't be held liable for the illegal uses that broke copyright.

Since then, commentary on what the Supreme Court decision means, for copyright holders and technology creators, has come fast and thick. The Recording Industry Association of American (RIAA) announced, "The Supreme Court [held] that if you build a business that aids and abets theft you will be held accountable." Larry Lessig, notably of Creative Commons and the Eldred case, talked about ten years of diminished innovation in America. But why? The decision itself looks a bit nebulous to a layperson's eyes. If you're a coder, it might not be clear what happened or how it affects you.

Most of the technology created since 1983, hardware and software alike, have trusted the Sony "safe harbor" to protect them against liability. This decision seemed to say not-so-fast: Sony doesn't necessarily protect makers of a technology who induce their customers to break copyright. As legal professor Randy Picker, who filed a "Friend of the Court" or Amicus document on behalf of MGM, put it, "The big picture on this is the Supreme Court has introduced a new set of doctrines into copyright that will catch the Groksters of the world...If a company is saying 'we're going to rely on lots of copyright infringement for our business,' that makes you a bad guy and you can't do that."

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But it might not be quite as clear as that. Fred Von Lohmann of the EFF, who represented Grokster in district and circuit court, pointed out that Sony also openly advertised dubious uses of its Betamax, some of which were ruled a fair use, like time shifting. But "Librarying [building up a library of aired works for repeat viewing] was never ruled a fair use." So, what makes Sony OK and Grokster not? If it's fair use, Von Lohmann sees that as something developers can't rely on at the moment. "It's a lottery," he says. "Right now it's very hard to tell what if anything is a fair use. Even the Sony fair uses are in question; many people on the other side would like to say Sony doesn't apply in the internet age."

The Souter opinion stepped around clarifying or narrowing Sony. The high court seemed to indicate that you could say you relied on infringement, just not, for goodness sake, as much as Grokster appeared to have. The term they gave the thing that Grokster did that Sony didn't is taken from patent law: inducement. "Inducement" means one thing and one thing only; it's what's called a "term of art" in the legal world. A term of art is a normal word that means something special within the scope of a particular field. Scope, for example, means one thing in programming—the subsection of a program over which a particular variable operates—that it never means in the wider world. Inducement is about intending to have your customers break the law, encouraging them, and telling them how. In this context, it means that if the Grokster defendants did everything the MGM plaintiffs claim they did, they actively and egregiously encouraged and profited from their end users' breaking of copyright. That's inducement, and that's what the Supreme Court said for sure you can't do.

What you are allowed to do in principle, is make a multipurpose thing. To put it in real-world terms, if you make and sell a crowbar, society doesn't hold you responsible for your customers using the crowbar to break in and steal things.

The Supreme Court set up the idea of intellectual property's crowbar in 1983, in the Betamax case. Betamax set up the idea of "substantial noninfringing use," meaning that people could use a Betamax machine to record things that were legal, even if, at that point, they weren't.

Betamax had sweeping effects. Companies or persons could make a product that was part of the chain of copyright infringement, and as long as the sole purpose of it wasn't breaking copyright, they didn't need to fear litigation. These multipurpose devices were in a Sony-derived "Safe Harbor." Something single purpose, like, say, an audiotape of a specific length of a particular copyrighted work, could be, and was, ruled to be illegal, as it had no real noninfringing use. It meant that when you made something with a legal purpose, you didn't have to imagine all the possible uses it had and work out if all those uses were legal.

MGM see companies such as Grokster and StreamCast Networks (makers of Morpheus and MusicCity) as basing their entire business models on allowing their customers to break copyright. They claim that's not what Sony was designed to protect, and the Supreme Court agreed.

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