Narrow Grokster Decision Predicted; Betamax Statute Unlikely, Experts Say

Panelists predicted a narrow decision focused more on “behavioral characteristics” than “copyright owners in the engineering room,” as RIAA Exec. Vp-Govt. Relations Mitch Glazier said. Justices in the oral arguments were clear that “you shouldn’t be able to use piracy as venture capital,” he said. The court definitely doesn’t want to start a “death march of discovery” to settle the facts of the case all over again, Deutsch said. Adam Eisgrau, P2P United exec. dir., said there seemed to be consensus in the oral arguments that any assessment of P2P liability “can’t be an early stage snapshot,” before the business and culture of file-sharing has matured. A single inconclusive study of infringement on P2P services is backing the content industry’s entire case for business liability, Eisgrau added. If the court settles on an inducement-to-piracy standard, rather than contributory infringement, that will be fine with P2P companies, Sharman Networks (Kazaa) chief lobbyist Phil Corwin said. Kazaa has poured its commercial energies into licensed games, movies and independent music, not inducing piracy through its free offering, he said.

Calls for codification of the Betamax standard are pointless since “nobody is going to agree what piracy is,” Glazier said. Some people think “sharing [copyrighted files] with 200 people in your dorm is not piracy.” What became the court’s Betamax majority opinion was culled from several dissents, none of which gave “a clear test” for judging a technology’s liability for infringement, Glazier said. The commercial perspective of the copyright owner will ultimately decide what’s enforceable and what isn’t, which is why no one has ever been jailed for burning 2 copies of a CD for friends, he added. Eisgrau said a potential solution for illicit sharing -- a collective licensing system for all artists, regardless of label -- is “taboo and off the table” for political reasons.

The Verizon and MPAA officials traded defenses of their cooperation with each other. DSL providers are often accused of having no economic incentive to fight piracy because so much traffic is file sharing, but ISPs are inking deals with content companies like Rhapsody all the time, Deutsch said. Glazier defended the content industry from claims it wants to undermine tech companies. “We are interdependent business partners who cut deals all the time,” he said: It’s “only in this weird false world that we're quote, unquote, opponents.” Eisgrau challenged Glazier’s cooperation claims, saying Streamcast was close to a licensing deal with Rhapsody in late 2003 when the RIAA threatened to “blacklist” Rhapsody. Glazier disputed the characterization. He said businesses are free to license P2P companies, but many would rather not for fear of rewarding companies that built their reputations on illicit file-sharing.

The focus on piracy by file-sharing, rather than burning, irked the P2P-affiliated panelists. There’s “tremendous schizophrenia” in the content industry over hard piracy, with Sony’s studio div. proposing a DVD that can be copied 3 times while its music div. tries to block copying entirely, Corwin said. “Peer to peer is a convenient whipping boy” but its contribution to piracy is vastly overstated. Deutsch noted that just a few years ago, former Disney CEO Michael Eisner was calling Apple’s “rip, mix and burn” campaign an inducement to piracy, but no one is threatening Apple in court.