10:51 PM

Today was a very big day for copyright law and the Internet. The Supreme Court, in a unanimous decision, ruled that manufacturers of technologies which can be used to infringe on copyright are potentially liable for any infringing use of that technology by end users. The ruling in MGM v. Grokster is available as a PDF (thanks to SCOTUSblog for the link). My notes on the decision follow.

The ruling states that "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." In retrospect, this is not a surprising outcome. It was clear from the oral arguments that the Court still basically supported Sony but that they were uncomfortable with letting Grokster escape liability. By introducing the intent of the distributor, they can find Grokster liable without creating liability for any device which can potentially be used to infringe copyright.

The ruling calls Napster "notorious." Is that fair? It strikes me as hyperbolic, but it may well be accurate. There's a bit of a guilt by association thing going on. Napster is obviously evil, in the Court's view, and anything tied to Napster is also evil. StreamCast worked to get users of Napster to adopt their software, and Grokster gets in trouble because its name is derived from Napster.

The profit motive, at least as expressed on page 8 of the ruling, strikes me as problematic. While the software is being used, advertisements are displayed to the user. Obviously the companies want to encourage users to use the software more, so as to increase the advertising revenue, but there seems a logical leap from that statement to the conclusion that therefore the principal intended use was to infringe on copyright. Sony's income was from the sale of the VCR, not its use, but it's undoubtedly true that some VCR sales occurred for the purpose of infringing on copyright. Selling a device with the knowledge that it may be used for infringing purposes doesn't strike me as inherently different than advertising while software is being used, possibly for infringing purposes.

The business model itself isn't the problem. Encouraging users to engage in infringing uses, where those uses support the business model, may be a problem, but the ruling already established that the companies were encouraging infringing uses. I'm not sure how an advertisement based business model in itself suggests that the companies were dependent on infringement to succeed.

The ruling implies that the proportion of infringing use to noninfringing use is relevant to the question of liability. Is this expected use or actual use? Suppose I develop a technology with the expectation that it will be largely used for copyright infringement, but in fact the primary use turns out to be noninfringing. Am I liable for any infringing use which does occur? Either outcome feels problematic.

The ruling argues for indirect liability, stating that "[w]hen a widely shared service or product is used to commit infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, the only practical alternative being to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement." I agree that it's the American way to sue someone when you have been wronged. I also agree that an easy target for the lawsuit will always be preferred. I'm not sure I agree that in the absence of a desireable target, it's fair to create one by expanding the scope of liability.

One of the significant questions about this case was whether it would modify the Sony Betamax decision. Sony held that the manufacturer is not liable for a product which can be used to infringe copyright if the product is "capable of commercially significant noninfringing uses." MGM argued that noninfringing uses of Grokster were not commercially significant. This ruling recasts the Sony ruling as dependent on "presuming or imputing intent to cause infringement solely from the design or distribution of a product capable of substantial lawful use." It's not the noninfringing uses themselves, it's whether it was intended to be used for infringing purposes. The court sidesteps MGM's argument.

At the same time, I can't judge the validity of the Court's conclusion without reviewing the Sony decision. Sony is typically presented as hinging on capability of noninfringing uses. It's possible that this is a misrepresentation of the original decision, and the decision in fact is based on the intent for noninfringing use. It's also possible that the current ruling is changing the meaning of Sony while simultaneously denying that it is doing so. This merits further research and discussion.

I tend to resist lumping together copyright, patent, and other rights in information under the umbrella of "intellectual property." While copyright and patents both give rights to the use of information, the laws governing them are completely independent and referring to them as a single unit blurs their distinctions. The Supreme Court feels no such need to keep them separate. In supporting the claim that encouraging copyright infringement creates liability for copyright infringement, the ruling cites a list of cases of patent infringement. In this instance, at least, the Court does not distinguish between copyright and patents. But then the ruling states that the Sony ruling was also derived from patent law, so perhaps this is nothing new.

I generally trust the Supreme Court to have a sufficient understanding of new technology to be able to rule reasonably on the technology. This trust is reinforced by the proper use of the terminology and jargon of the technology. So the statement that "StreamCast beamed onto the computer screens of users . . . ads . . ." (page 20) makes me nervous. What exactly does "beamed" mean? It's not as bad as an egregious misuse of technical terminology, but the failure to use more specific language reduces my confidence that the Court knows what it's talking about. This is reinforced by the ruling's discussion of OpenNap, which strikes me as fuzzy. On the other hand, I don't know enough about OpenNap to evaluate the ruling's use of the term.

This concludes my notes on the first reading of the opinion in this case. There are two concurrences, but it is late and they will have to wait until tomorrow.

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