Grokster Loses

by on June 27, 2005 · 24 comments

I would say I called the Grokster decision. The “substantial non-infringing use” standard did not exist in a vacuum. Rather, it was embedded in a set of considerations concerning the motivations and impact of a company’s business model. In Sony’s case, the Betamax was clearly an innovative new piece of hardware that incidentally enabled copyright infringement. Grokster, in contrast, was a novel way to evade copyright law that incidentally allowed people to share a few legal files. Rather than buying Grokster’s fatuous arguments and mechanistically applying the “substantial non-infringing use” standard where it clearly didn’t make sense, they looked at Grokster’s actual behavior and business model and concluded–correctly in my opinion–that Grokster was obviously a program designed to facilitate copyright infringement.

The interesting question is whether the court has created a new standard, a successor to “substantial non-infringing use”, that will provide the technology industry with a safe harbor for innovation. On a cursory reading, it appears that the opinion is decided narrowly enough–focusing on Grokster’s specific business model and the ample evidence that they fully intended to attract illegal file-traders–that this shouldn’t strike fear into the hearts of future entrepreneurs. As long as a product is designed for a legitimate use, the fact that many of its users engage in piracy shouldn’t put the product under a legal cloud. I could be wrong, though.

(Cross-posted to the Bit Bucket)

  • http://enigma-foundry.blogspot.com/ enigma_foundry

    Hopefully, you are right—P2P is here to stay, I hope. The way that grokster advertised and sold their product showed that they had actively been promoting it’s infringing uses–imagine if Sony had advertised the BetaMax as a way to break copyright laws–they may have lost!

    But, despit Grokster, there really hasn’t been a assault on Sony—a P2P company will now be very carefull in their advertising.

    The substantial non-infringing use strikes the appropriate balance betwen property rights and the first Amendment rights–The First Amendment wins, hands down.

  • http://enigma-foundry.blogspot.com/ enigma_foundry

    PS: I use P2P every day, only for files that I can trade legally–what the fascists who want to suppress P2P are really after is to halt the radical and very quick de-monetization of certain digital products. Just look at all the heat the BBC took for making all of Beethoven’s Symphonies available for free download. Sorry, but my First Amendment rights come before any corporations “rights” to maintain a lucrative line of business. I hope that the big record labels all go bust, the sooner the better. They will be replaced by enterprenuers who will offer more diverse goods in a “long tail” market. Employment in certain industries (publishing, recording, marketing,) will drop or undergo preofound organizational changes. That is a classic example of “creative destruction” in the market place. Welcome to market forces, baby!

  • http://enigmafoundry.wordpress.com eee_eff

    Hopefully, you are right—P2P is here to stay, I hope. The way that grokster advertised and sold their product showed that they had actively been promoting it’s infringing uses–imagine if Sony had advertised the BetaMax as a way to break copyright laws–they may have lost!

    But, despit Grokster, there really hasn’t been a assault on Sony—a P2P company will now be very carefull in their advertising.

    The substantial non-infringing use strikes the appropriate balance betwen property rights and the first Amendment rights–The First Amendment wins, hands down.

  • http://enigmafoundry.wordpress.com eee_eff

    PS: I use P2P every day, only for files that I can trade legally–what the fascists who want to suppress P2P are really after is to halt the radical and very quick de-monetization of certain digital products. Just look at all the heat the BBC took for making all of Beethoven’s Symphonies available for free download. Sorry, but my First Amendment rights come before any corporations “rights” to maintain a lucrative line of business. I hope that the big record labels all go bust, the sooner the better. They will be replaced by enterprenuers who will offer more diverse goods in a “long tail” market. Employment in certain industries (publishing, recording, marketing,) will drop or undergo preofound organizational changes. That is a classic example of “creative destruction” in the market place. Welcome to market forces, baby!

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