Oerdin's torch carries on - SCOTUS permits lawsuits against file-sharing

[Mr. Harley]

By HOPE YEN, Associated Press Writer
59 minutes ago



WASHINGTON - Internet file-sharing services will be held responsible if they intend for their customers to use software primarily to swap songs and movies illegally, the Supreme Court ruled Monday, rejecting warnings that the lawsuits will stunt growth of cool tech gadgets such as the next iPod.

The unanimous decision sends the case back to lower court, which had ruled in favor of file-sharing services Grokster Ltd. and StreamCast Networks Inc. on the grounds that the companies couldn't be sued. The justices said there was enough evidence of unlawful intent for the case to go to trial.

File-sharing services shouldn't get a free pass on bad behavior, justices said.

"We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties," Justice David H. Souter wrote for the court.

At issue was whether the file-sharing services should be held liable even if they have no direct control over what millions of online users are doing with the software they provide for free. As much as 90 percent of songs and movies copied on the file-sharing networks are downloaded illegally, according to music industry filings.

The entertainment industry said it needed protection against the billions of dollars in revenue they lose to illegal swapping. Consumer groups worried that expanded liability will stifle the technology revolution of the last two decades that brought video cassette recorders, MP3 players and Apple's iPod.

Companies will have to pay music and movie artists for up to billions in losses if they are found to have promoted illegal downloading.

Two lower courts previously sided with Grokster without holding a trial. They each based their decisions on the 1984 Supreme Court ruling that Sony Corp (NYSE:SNE - news). could not be sued over consumers who used its VCRs to make illegal copies of movies.

The lower courts reasoned that, like VCRs, the file-sharing software can be used for "substantial" legal purposes, such as giving away free songs, free software or government documents. They also said the file-sharing services were not legally responsible because they don't have central servers pointing users to copyright material.

But in Monday's ruling, Souter said lower courts could find the file-sharing services responsible by examining factors such as how companies marketed the product or whether they took easily available steps to reduce infringing uses.

"There is substantial evidence in MGM's favor on all elements of inducement," Souter wrote.

In the closely watched case, supporting the effort to sue the companies were dozens of entertainment industry companies, including musicians Don Henley, Sheryl Crow and the Dixie Chicks, as well as attorneys general in 40 states.

About 20 independent recording artists, including musician and producer Brian Eno, rockers Heart and rapper-activist Chuck D, supported the file-sharing technology to allow for greater distribution of their works.

Monday's ruling gives the entertainment industry another legal option to the more costly and less popular route of going directly after millions of online file-swappers believed to distribute songs and movies illegally.

It's unclear how much the decision will actually deter the widespread problem of piracy since software programs created abroad won't be subject to the tougher U.S. copyright laws. Still, analysts say the court's stern rebuke should provide a boost to many file-sharing services that offer legal downloading for a fee.

Industry observers have said a ruling against Grokster could also prompt stiffer enforcement from European regulators, who were watching the case for guidance on tackling copyright questions in their countries.

Recording companies in the United States have already sued thousands of individual users; at least 600 of the cases were eventually settled for roughly $3,000 each.

The case is Metro-Goldwyn-Mayer Studios v. Grokster, 04-480.

Unanimous, to boot.

[chequita guevara]

Irrelevent, though. Technology and the will of the people will break these stupid laws and rulings.

[Moral Hazard]

The way I read it, it's a good ruling, true its relatively toothless.
It doesn't necessarily say that grokster is guilty but that they could be liable when looking at factors such as how companies marketed the product or whether they took easily available steps to reduce infringing uses.

We give people copyrights, so mechanisms which are primarily designed to break copyright should be held to account, the court has drawn the line somewhere between Napster and the VCR. I would say that the Ipod would fall on the legal side of things, especially given sites like Itunes.

Of course, Im not going to win any arguments on the internet where most people believe they have the right to steal music.

[Mr. Harley]

No - the problem is that it puts the onus on the creator of the technology, and lets copyright holders used the threat of lawsuits to muzzle technological development. If this court had heard the Betamax case, we wouldn't have VCR's IMHO. Without that, DVD's never make it as a viable alternative for videotapes, because people are then not in the habit of owning their own movies.

[Moral Hazard]

Your right that it puts an onus on technology creators to act responsibly; Souter said,

We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement , is liable for the resulting acts of infringement by third parties

I think the affirmative steps part is important. Besides the threat of lawsuits was always there. This decision clarifies the line. They could of said that they have absolutely no liability for third party action, but thats taking it a bit too far imo.

Oh and didn't 4 or 5 of these justices sit for the VCR case.

[SpencerH]

A bad decision. I wonder if SONY will sue itself for selling DVD-RW drives.

[Imran Siddiqui]

But in Monday's ruling, Souter said lower courts could find the file-sharing services responsible by examining factors such as how companies marketed the product or whether they took easily available steps to reduce infringing uses.

Good ruling. If they market it as, hey share illegal files, then they get busted. Otherwise, if they took all EASILY possible (they don't have to break the bank) moves to prevent illegal sharing, then they are safe.

[SpencerH]

Except that whether they "took all EASILY possible moves" is undefined (and undefinable IMO). Its typical Souter/liberal bull****.

[Imran Siddiqui]

That's kind of why we have lower federal courts, Spencer. The Supreme Court hardly defines much of anything. It leaves it to the lower courts to kick it around.

Though I love how you blame Souter and liberals, when it was unanimous . Damn that liberal Scalia and Thomas!!

[Ted Striker]

SCROTUM

[aneeshm]

Originally posted by chegitz guevara
Irrelevent, though. Technology and the will of the people will break these stupid laws and rulings.

One time I agree with you .

[Ted Striker]

I do think technology will eventually break the current system and hand it back over to the people.

When that happens, is anyone's guess.

[SpencerH]

And the lower courts had already been siding with Grokster citing agreement with sony.

I know it was unanimous (with seven votes BTW), I just dislike Souter and he had written what you quoted. The funny part is that Breyer wrote an opinion (joined by Stevens and O'connor) that reads like a dissent until the end where he concurs with the court. I'm at a loss to understand that concurrance.

http://a257.g.akamaitech.net/7/257/2422/27jun20051200/www.supremecourtus.gov/opinions/04pdf/04-480.pdf

[Imran Siddiqui]

And the lower courts had already been siding with Grokster citing agreement with sony.

Which probably means that they will more likely rule in favor of the P2P companies. The problem is that Grokster may have actively courted Napster users who were downloading illegally and counted on those users to make Grokster money. If that proven true, then Grokster is in trouble. The lower courts granted summary judgment for Grokster. The Supreme Court ruled that they can look these cases more in depth to see if the companies clearly promoted of fostered infringement (beyond mere knowledge of third party action).

Btw, you are reading the Breyer opinion 100% incorrectly. His concurrance is disagreeing with GINSBURG's concurrence, which wants to toughen the Sony standard. Breyer agrees fully with Souter, and is warning against Ginsburg's decision, which Kennedy and Rehnquist joined, in which they want the defendant to prove in greater detail.

Btw, there were NINE votes, just because there is no concurrence didn't mean that Scalia and Thomas did not vote (SCOTUS justices don't obstain). The lack of opinion means that they agreed fully with Souter, who didn't take a position on whether Sony should be read stricter or not.

[Rufus T. Firefly]

As I read this, it seems to me that as long as file-sharing services plaster themselves with all sorts of warnings about how naughty copyright infringement is, and how sad it would make them if their users indulged, they would effectively innoculate themselves. Is that so?

It reminds me of the upshot of one of the Supremes old porn decisions (Pope vs. Illinois, I think). The court ruled that a text could be considered "obscene" only if it were utterly without "redeeming social value." This resulted in paperbacks (and this is an actual example, from the adult bookstore I used to work in) that began with "Henry David Thoreau once said, 'The mass of men lead lives of quiet desperation.' Such was the case of the Thornton family..." before launching into 150 pages of every perversion imaginable -- which weren't obscene because, hey, Thoreau has redeeming social value.