P2P COMPANIES FACE UNWARRANTED ATTACKS BY CONTENT OWNERS, LAWYERS CHARGE

Court’s protection of technologies capable of substantial noninfringing uses “is under substantial attack in the current cases,” said Andrew Bridges, who represents Morpheus developer Streamcast Networks. He agreed with Electronic Freedom Foundation’s Fred von Lohmann that operative judicial principle growing from Napster case was “products good, services bad.” But entertainment law expert Lionel Sobel said they were baselessly trying to extend Sony ruling, which addressed only contributory liability, to deflect vicarious liability, too.

Content owners, attacking hardware such as digital video recorders, seek to gain patent-like prerogatives over inventions through their copyrights and ultimately to abolish all forms of “autonomous technology -- that means technology you can take home and use unconnected to a network,” Bridges said. Plaintiffs’ goal -- demonstrated in efforts in ReplayTV case to force defendant SonicBlue to create new software to monitor and report viewers’ habits -- is to make technology companies replace software with new versions dictated by copyright owners, without users’ consent.

Like burglarized homeowner suing neighbor for failing to build fence, “the content owners say it’s up to everyone else to enforce their rights,” Bridges said. He said instant-messaging systems run by media companies such as AOL Time Warner constituted huge file-sharing channel, but content owners preferred to pick on technology start-ups. Key strategy is legally attacking new technologies as early as possible, “at a point when the benefits of the new technologies are not yet visible,” he said.

But media companies and sympathetic judges will struggle perhaps in vain to create protective legal standards, Bridges said. He said if technology were unprotected because “any bad uses” are possible, none would be exempt. Using ratio of approved and disapproved uses would be arbitrary and unmanageable, he said. General knowledge that any innovation will be used for infringement can’t suffice for liability, Bridges said; Sony advertised Betamax for unprotected program archiving. Plaintiffs may have to show advance knowledge of particular infringements, he said. And Napster case liability theory that company, like flea market, provided site and facilities for infringement, translates poorly to later generation of more distributed sharing technologies, he said: “What are the facilities? What are the premises?… The entire Internet.” Implication of plaintiffs’ theories is that defendants should be liable for business plans built on infringement, Bridges said. “I guess we'll lock up all the DSL ISPs,” he said facetiously. “I guess we can put most of the computer industry and all of the Internet in the trash can.”

Plaintiffs seek to have technologies redesigned to their specifications, von Lohmann said, citing discovery demands for ReplayTV engineers’ development notes in effort to demonstrate less infringing designs were possible. Napster cases indicate operating file-sharing service means never being able to say you're sorry, he said. Napster tried to build up huge following as leverage to come to table later with content owners, but instead was crushed. Von Lohmann painted world where technology companies must seek advance permission from copyright owners, putting up with demands for architecture changes and licensing fees, plus long launch delays.

No case can decide Hollywood-Silicon Valley war because neither side will accept defeat after any particular battle, said Sobel, who publishes Entertainment Law Reporter. He said conflict must end in Congress, and on international level in World Trade Organization or World Intellectual Property Organization. But Sobel declared Senate Commerce Committee Chmn. Hollings’ (D-S.C.) mandatory hardware-controls proposal “dead on arrival” -- not on policy grounds but because Hollings’ Commerce Committee tried to usurp Judiciary Committee’s authority over copyright. Bill also would require controls to distinguish and permit fair use -- determination, Sobel said, that was vexing to federal appellate judges let alone software. He proposed compulsory licensing scheme in which ISPs would collect fees -- less than $1 for song, few dollars per movie -- for copyright owners and receive for their service cut comparable to that of retailer. That would allow media companies to avoid building their own “digital warehouses,” Sobel said, but he had been told industry had too great investment in physical distribution and relationships with retailers to support such licensing plan. After panel, participant Michael Page said encryption would defeat that kind of approach.