Flurry of Briefs Arrive at Supreme Court on Grokster Case

“If the defendant’s product is overwhelmingly used for infringing purposes, and the viability of the defendant’s business depends on the revenue and consumer interest generated by such infringement, such evidence alone suffices to support liability under Sony,” the U.S. Solicitor Gen.’s brief said. “Moreover, it is unclear that respondents’ systems are particularly efficient for the potential noninfringing uses cited by the court of appeals.”

A brief from state attorneys gen. said losses from P2P sharing “are not limited to brick-and-mortar businesses, but extend to online retailing, where the black market in copyrighted music has stunted the growth of legitimate music distribution over the Internet.” Licensed download companies including MovieLink and Napster said in their brief that users trading on P2P networks have no guarantees of the quality of the download; they compared their own efforts to a retail store and P2P companies to “a card table at a street corner… Developing and implementing a legal, for-profit business using new technology is truly innovative -- providing a black market for people to steal music and films is not.”

The “willful blindness” in P2P network design leads to crimes other than copyright, the state attorneys gen. brief argued: “If respondents can evade responsibility for facilitating widespread copyright infringement simply by pretending to not know that it is occurring, then the creators of P2P networks that facilitate anonymous distribution of illicit pornography will believe they can do the same.” The professional sports leagues’ brief warned of the “Hobson’s choice” content owners face if they have to fight copyright violators individually: “[F]lood the federal courts with numerous ‘John Doe’ lawsuits against individual infringers… or permit that infringement to go unchallenged and allow the value of their works to bleed away.”

CEA Pres. Gary Shapiro predicted a Supreme Court victory in the key Grokster case, but wouldn’t say Mon. where the votes would come. Hollywood “can’t just outmaneuver us and they can’t just out-lobby us,” he said: “At some point, common sense has to prevail.” The group, joining a rush against a Tues. deadline, filed a friend of the court brief jointly with the Computer & Communications Industry Assn. and the Home Recording Rights Coalition in behalf of Grokster and a 9th U.S. Appeals Court, San Francisco, ruling that makers of decentralized P2P software aren’t secondarily liable for copyright infringements of their users. CEA’s brief, and Shapiro in a phone interview, urged the high court to apply against Hollywood its Sony Betamax case, which protected the VCR against similar studio opposition. The entertainment industry has been trying to distinguish Sony as applying only to the time-shifting of copyrighted works, which doesn’t greatly harm their value. CEA called Sony the “Magna Carta” of technology innovation and reiterated the position of Hollywood’s diverse opponents that their defeat in Grokster would hamstring technology innovation. If, as the entertainment industry argues, its defeat would interfere with investment in creating content, that’s the industry’s problem and not a good reason to contort public policy, Shapiro said: “It’s not the role of policy to protect entrenched industries.” He said the case was probably the most important for CEA since Sony, over 2 decades ago, and for the high court this term. Asked about putting together a Supreme Court majority, he said one of the few pertinent recent decisions had been Eldred v. Ashcroft, upholding against constitutional challenge congressional extension of copyright terms. Shapiro noted that justices David Breyer and John Paul Stevens had dissented but pointedly declined to count them toward a pro-Grokster majority or for that matter predict where any of the votes would come from. CEA didn’t ask for the Supreme Court to end the case by affirming the 9th circuit; it seeks a remand to district court for a factual determination whether P2P has “substantial non- infringing uses,” Sony’s test for protection. The joint brief was written by outside CEA counsel Bruce Joseph, Shapiro said. He said his side was trying to turn around a publicity coup for Hollywood when its supporters filed their briefs a month ago. In that vein, CEA is organizing a Washington conference March 16 on “IP and Creativity: Redefining the Issue.”

Intel argued that changing the Sony standard would slow innovation, a common refrain from tech companies. “Faced with impossible predictions about how as yet undeveloped technologies might be used, ambiguous tests that would be unpredictable in their application, and nearly limitless statutory damages for guessing wrong about the unknowable, innovators, such as Intel, would grow timid,” Intel’s brief said. Siding with the plaintiffs in the case would create a new right for the copyright owner “to dictate the design of a staple article of commerce,” the brief said.