Don’t Get Too Excited

by on August 19, 2004 · 6 comments

The Ninth Circuit Court of Appeals handed down a decision today in the Grokster case. It’s a significant victory for developers of decentralized peer-to-peer file-sharing systems, whom cannot now be held liable for the copyright infringing activities of users.

The last paragraph of the ruling, however, will undoubtedly prompt today’s losers to direct even more resources toward the INDUCE Act:

Indeed, the Supreme Court has admonished us to leave such matters to Congress. In Sony-Betamax, the Court spoke quite clearly about the role of Congress in applying copyright law to new technologies. As the Supreme Court stated in that case, “The direction of Art. I is that Congress shall have the power to promote the progress of science and the useful arts. When, as here, the Constitution is permissive, the sign of how far Congress has chosen to go can come only from Congress.” 464 U.S. at 456 (quoting Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 530 (1972)).

  • Matt

    yes, i’m sure it will. and i’m sure that the plaintiffs will ignore the following statement in the ruling.

    The introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through well established distribution mechanisms. Yet, history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine, or an MP3 player.Thus, it is prudent for courts to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.

    don’t all the plaintiffs have orrin hatch on speed dial anyway?

  • Matt

    yes, i’m sure it will. and i’m sure that the plaintiffs will ignore the following statement in the ruling.

    The introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through well established distribution mechanisms. Yet, history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine, or an MP3 player.Thus, it is prudent for courts to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.

    don’t all the plaintiffs have orrin hatch on speed dial anyway?

  • Andrew Greenberg

    And there remain other problems as well. Although this analysis found no liability for Grokster, because of the presence of a self-inflicted lack of control, it tacitly accepts therefore, the problems of control-based liability; the curse of Fonovisa and the wild extensions of the Dance Hall cases.

    On one hand, it is very well and good that there exist a safe harbour grounded in control. On the other hand, it would better if there existed a safe harbour grounded in mere capacity for a noninfringing use.

    It is arcane and bizarre that the courts would impose a tool for technologies to engineer around copyright liability, where there is simply no credible technical or policy-based justification for it. Control is simply the twenty-first century extension of a series of cases showing historical expansion of copyright rights arising from mere relationships with an infringer:

    In the beginning, there was respondeat superior, the idea that I am not liable for the infringement of another, unless the other had a relationship with me equating to that of principal and agent, or employer and employee. Outside such a relationship, the plaintiff had to prove either that I directly infringed or contributed to the infringement of another.

    Eventually, this created difficulties, the most understandable of which was the Dance Hall scenario, where bands who publicly performed at a Dance Hall were ill-paid, typically disbanded quickly and were judgment proof. The Dance Hall made the big bucks, and because the bands were neither employed by or agents of the Dance Hall, it was off the hook unless they provided the bands with the music. Ultimately, the courts expanded vicarious liability to reach them. It was an uncomfortable, but pretty equitable and reasonable compromise to resolve cases with pretty bad facts.

    Then came the landlord-tenant cases, where ever-greedy content owners emboldened by the Dance Hall results tried to reach landlords of businesses where infringement occurs, hoping that the threat of liability would cause land-owners to serve as remote copyright police forces. Happily, the Courts refused this line of cases.

    And then came the record store chain cases, where the first really incomprehensible overreach happened: a chain of record stores who has only contracted with a local franchise owner selling bootlegs, was held to be liable under the modern two part test. (right and ability to control + direct financial benefit).

    This might have been alright, and distinguished on facts, but alas, the notion of control moved from the original principal and agent relationship to a “mere capacity to control and negligent failure to police test,” in the swap meet cases, where the control and benefit test was extended to flea market owners where bootlegging occurred.

    And then the swap meet version of control crossed over into the technology world with Napster, and in a sense, Aimster. Control became the byword, even though it is a ridiculous basis for justifying undue technology regulation.

    The net result is that we have a test that is both too much and not enough regulation. It is too much, since it requires technologists to take whatever technology they have and hack it with control-divesting features to avoid liability, whetever the technical merits or consequences might be. And it is not enough, since obviously RIAA lost Grokster and feels a need to fight their fight at whatever cost.

    So, its good news and bad news. It is good news, because it somewhat held back on yet another invitation to expand the already out-of-whack control-based liability. It is bad news, because it ratifies and depends upon this unhealthy expansion of classical relationship-based liability to the modern “mere capacity to control and negligent failure to police.”

    Induce is not a bad idea, theoretically, if it were adequately and intelligently circumscribed. But only if it were implemented as a proxy and substitute for control. Alas, S. 2560 as drafted comes nowhere close to that standard, both serving as an additiion ground for liability in addition to control and providing no balanced circumscriptions to safeguard against undue technology regulation.

  • Andrew Greenberg

    And there remain other problems as well. Although this analysis found no liability for Grokster, because of the presence of a self-inflicted lack of control, it tacitly accepts therefore, the problems of control-based liability; the curse of Fonovisa and the wild extensions of the Dance Hall cases.

    On one hand, it is very well and good that there exist a safe harbour grounded in control. On the other hand, it would better if there existed a safe harbour grounded in mere capacity for a noninfringing use.

    It is arcane and bizarre that the courts would impose a tool for technologies to engineer around copyright liability, where there is simply no credible technical or policy-based justification for it. Control is simply the twenty-first century extension of a series of cases showing historical expansion of copyright rights arising from mere relationships with an infringer:

    In the beginning, there was respondeat superior, the idea that I am not liable for the infringement of another, unless the other had a relationship with me equating to that of principal and agent, or employer and employee. Outside such a relationship, the plaintiff had to prove either that I directly infringed or contributed to the infringement of another.

    Eventually, this created difficulties, the most understandable of which was the Dance Hall scenario, where bands who publicly performed at a Dance Hall were ill-paid, typically disbanded quickly and were judgment proof. The Dance Hall made the big bucks, and because the bands were neither employed by or agents of the Dance Hall, it was off the hook unless they provided the bands with the music. Ultimately, the courts expanded vicarious liability to reach them. It was an uncomfortable, but pretty equitable and reasonable compromise to resolve cases with pretty bad facts.

    Then came the landlord-tenant cases, where ever-greedy content owners emboldened by the Dance Hall results tried to reach landlords of businesses where infringement occurs, hoping that the threat of liability would cause land-owners to serve as remote copyright police forces. Happily, the Courts refused this line of cases.

    And then came the record store chain cases, where the first really incomprehensible overreach happened: a chain of record stores who has only contracted with a local franchise owner selling bootlegs, was held to be liable under the modern two part test. (right and ability to control + direct financial benefit).

    This might have been alright, and distinguished on facts, but alas, the notion of control moved from the original principal and agent relationship to a “mere capacity to control and negligent failure to police test,” in the swap meet cases, where the control and benefit test was extended to flea market owners where bootlegging occurred.

    And then the swap meet version of control crossed over into the technology world with Napster, and in a sense, Aimster. Control became the byword, even though it is a ridiculous basis for justifying undue technology regulation.

    The net result is that we have a test that is both too much and not enough regulation. It is too much, since it requires technologists to take whatever technology they have and hack it with control-divesting features to avoid liability, whetever the technical merits or consequences might be. And it is not enough, since obviously RIAA lost Grokster and feels a need to fight their fight at whatever cost.

    So, its good news and bad news. It is good news, because it somewhat held back on yet another invitation to expand the already out-of-whack control-based liability. It is bad news, because it ratifies and depends upon this unhealthy expansion of classical relationship-based liability to the modern “mere capacity to control and negligent failure to police.”

    Induce is not a bad idea, theoretically, if it were adequately and intelligently circumscribed. But only if it were implemented as a proxy and substitute for control. Alas, S. 2560 as drafted comes nowhere close to that standard, both serving as an additiion ground for liability in addition to control and providing no balanced circumscriptions to safeguard against undue technology regulation.

  • Tabo

    Ahhh cool siteTreeXlog

  • Tabo

    Ahhh cool siteTreeXlog

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