P2P Defenders Issue Warnings on Grokster Case

Supporters of file-sharing programs Grokster and StreamCast scourgedthe entertainment industry yesterday following the filing of briefs with theU.S. Supreme Court in a case that could be Armageddon for the peer-to-peersoftware industry.

The High Court is scheduled to hear oral arguments in the dispute on March29. Entertainment industry groups are attempting to hold the file-sharing network operators responsible for illegal activity that occurs over their networks.

“This case is about innovation, not just for peer-to-peer technology, butfor the entire American technology sector,” Fred von Lohmann, an attorneywith the Electronic Frontier Foundation and counsel to StreamCast in thecase, said at a news conference held in Washington, D.C.

Fire Engineers, Hire Lawyers

“The question boils down to [this],” he said. “Will American technology companies be hiringmore engineers, or will they be firing engineers and hiring lawyersinstead?”

Gigi Sohn, president of Public Knowledge, the consumer action group hostingthe news session, explained that supporters were united behind a singleprinciple: that manufacturers, distributors and financiers of technologiescapable of substantial non-infringing uses should not be held liable forcopyright infringement engaged in by users of those technologies.

“This case is about much, much more than peer-to-peer technology,” observedMichael Page, another attorney representing Grokster in the case.

Toolmaker’s Nightmare

“The real threat of this case is that content owners are asking the SupremeCourt to write grossly broader rules for when the supplier of any tool willbe liable for what people will do with it,” he argued.

He maintained that the courts have already broadened the rules on “vicariousliability” set out by the Court in 1984 in what’s popularly known as theSony Betamax case. Currently, those rules look at whether thedistributor of a technology has the ability to control on a micro level what people do with that technology.

He claimed that the petitioners in this case are asking for something muchbroader. “They are asking courts for every case, for every technology, toask, ‘Could the engineers have designed it differently, in a way that thecopyright owners would like more?” he said.

Tutti Hollywood

“A rule like this will make it almost impossible for anyone to innovate andcreate new products unless they have the blessing of copyright holders,”Page continued. “And when the copyright holders are those who control theexisting distribution system, that blessing will not be forthcoming.”

Gary Shapiro, president of the Consumer Electronics Association inWashington, D.C., contended that the entertainment industry, through thiscase, is mounting an attack on Supreme Court precedent. “The Sony Betamaxdoctrine is the principle that has allowed our nation’s economy to surgeforward over the last 20 years,” he declared.

If that doctrine were changed now, he warned, it would have direconsequences for America. “If you were to change the rules of the gameright now, it will dry up capital and it will dry up innovation,” he said.”This sounds like we’re overstating it, but we’re not.”

Technology’s Magna Carta

“There is no case before the Supreme Court this year more important thanthis case,” he averred. “The Sony Betamax case has been our Magna Carta.It’s been our protection for over 20 years. and it is in jeopardy.”

By its nature, he reasoned, technology is disruptive to business models in the short term, but in the long term those same technologies help produce better, more profitable business models. “When the Sony Betamax decision was dealt,the motion picture business was an $8 billion industry; now it’s a $50billion industry,” he noted.

Michael Weiss, CEO of StreamCast, which makes the Morpheus file-sharingprogram, blasted the entertainment industry for tagging the entire P2Pindustry as “bad actors.”

Suing Grandma

“They call our software product ‘a service’; they call a service a network;and they call our work illegitimate,” he said. “They underwrite their ownresearch and proclaim they have independent proof that file-sharing iskilling their industry. In the meantime, they sue 12-year-old kids andgrandmas, dead or alive.”

Weiss was referring to a recent case involving Gertrude Walton, an 83-year-old, non-computer-using West Virginia woman who died in December but was sued for file sharing a month later.

“Make no mistake,” he cautioned. “What is at stake here is whether Hollywoodgets to control the development of new technology for the sole purpose ofprotecting their own self interest.”

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