After Supreme Court Case, War May Move To Congress

If the Supreme Court upholds a 9th U.S. Appeals Court, San Francisco opinion that peer-to-peer (P2P) service by Grokster didn’t break copyright law, the content industry is expected to push to clamp down on such networks. Questions remain about legislative efforts’ scope and speed, analysts at Legg Mason said Wed. The 108th Congress considered a measure to amend the copyright statute to codify liability for inducement to infringe copyright. Sens. Hatch (R-Utah) and Leahy (D-Vt.) said it didn’t address the other theories of secondary copyright liability -- vicarious and contributory liability. A final judicial victory for Grokster could hasten legislation, but its reach is unpredictable, analysts said.

If the Supreme Court overturns the 9th Circuit, there probably will be efforts to reestablish a “bright-line test” through legislation -- though some in the technology arena think Congress would be less amenable to calls to protect the technology sector than to protect the content community, Legg Mason said. Were widespread litigation wars to break out -- involving not only services like Grokster, but also large technology and network companies -- Congress may decide it must step in to say who’s liable for what kinds of infringement. Sen. Coleman (R-Minn.) warned both camps at a recent speaking engagement that they should spend the coming months finding common ground before bringing the feud to Capitol Hill: “Don’t come knocking until you're done talking” (WID March 17 p2).

“The betting money says this issue is coming back to Congress no matter what the court does,” said Center for Democracy & Technology (CDT) Assoc. Dir. Alan Davidson: “Nobody can really read the tea leaves to predict what the court might do at this point. It’s a risky situation for all sides right now.” One approach, which CDT argued it an amicus brief, would be for the court to uphold the Sony case on narrow grounds but remand Grokster to the lower courts. That way, content plaintiffs still could pursue Grokster for some of that company’s behavior, Davidson said.

Some, like Public Knowledge Pres. Gigi Sohn, hesitate to assume the issue will play out in Congress. Sohn said if the Supreme Court preserves the Sony doctrine, sending Grokster back to the lower courts for review of the facts, which have been sealed, lawmakers may not see the need to act. But “if either of the 2 sides wins flat out, than clearly there’s going to be a fight,” Sohn said, noting that all parties seem to be in wait-and-see mode. An RIAA spokeswoman agreed: “It is too premature for anyone to make a prediction at this point on the post-decision lay of the land.” Canvassing Capitol Hill before the court hears the case wastes resources, Sohn said: “There’s nothing wrong with planting the seed in people’s minds but pushing proposals before the court decision -- that doesn’t make any sense.”

One industry official said if the court leans toward favoring copyright holders, he doesn’t predict much action from pro-intellectual property lawmakers. Instead, they'll be busy warding off bills from the other side. The reverse could hold true if the 9th Circuit were upheld. The high court’s decision is expected in June, sources said.

Lead sponsors of stronger copyright legislation could be Sens. Hatch and Leahy and Reps. Smith (R-Tex.) and Berman (D-Cal.). Other Senate players include Sens. Cornyn (R-Tex.), Feinstein (D-Cal.) and Biden (D-Del.). Senate Majority Leader Frist (Tenn.) could be expected to sign on as a cosponsor, given Nashville’s music industry, the source said. In the House, Reps. Goodlatte (R-Va.), Bono (R-Cal.) and Sensenbrenner (R-Wis.) could play lead roles in drumming up support for a bill favoring the entertainment industry.

On the other side, Reps. Lofgren (D-Cal.), Cannon (R- Utah) and Commerce Committee Chmn. Barton (R-Tex.) are worth watching for Sony preservationist proposals, officials said. In the Senate, Coleman and Brownback (R- Kan.) are expected to figure in this debate, they said. Most importantly, Reps. Boucher (D-Va.) and Doolittle (R- Cal.), sponsors of the Digital Media Consumer Rights Act (HR-107) last Congress, will be back in Congress’s 2nd session, the Supreme Court decision notwithstanding. Boucher introduced a bill before Easter recess (HR-1201) that would codify the Sony standard. He told Washington Internet Daily Wed. he expects strong support from technology and consumer groups. Boucher said his measure would remove all doubt in the future about contributory liability.

The controversial Induce Act (S-2560), which never made it out of committee in the 108th Congress, was a “broad-fronted attack on file sharing,” Boucher said. He said the case against it was made so well the legislation is unlikely to resurface this year. CDT’s Davidson said if an Induce-like bill appeared, the crucial element would be scope. “If you make the bill too narrow, it makes it hard to go after bad actors in the future. If you draft it too broadly, you run into some of the same problems the Induce Act had -- fears that it sweeps in legitimate technology as well.” It’s hard to write a bill that satisfies all sides, and the devil is almost always in the details, he added.

“It’s no longer a matter of looking for this champion or that champion” in Congress,” said Michael Petricone, vp-tech policy for the Consumer Electronics Assn. Lawmaker savvy on the issue is impressive, he said, noting that the flap transcends MGM v. Grokster and even Sony. It’s now about the U.S. labor force, the economy and upholding the nation’s status as a global innovation leader. “There’s so much concern about this increasingly competitive international market,” Petricone said: “If we change our law and overrule [the Sony decision on] Betamax, that means American companies -- especially small companies -- will be burdened with excessive litigation,” which would give companies in China, India and Europe a “huge comparative advantage.”