Grokster Ruling Commentary

In this post, I’ll summarize some of the various blog reactions to Grokster that I’ve come across. You should start with my own, of course!

For another good roundup (with some overlap to this post), see Ernest Miller’s The Importance Of…

SCOTUSblog. Lyle Denniston characterizes the ruling as a “sweeping victory for music recording companies and movie studios.” (I don’t agree).

James DeLong characterizes the rulings as an “amazingly clear, and good, set of opinions.” On one level, I do think the opinions are clear–Grokster and StreamCast lose, and there is a new narrow doctrine of inducement. On the other hand, exactly what constitutes inducement, and the current meaning of the Sony “capable of substantial non-infringing use” language, seem remarkably unclear to me. I certainly would not want to be a judge interpreting a Sony defense in light of this opinion!

Larry Solum notes that the concurrence split on Sony “indicate where the lines are drawn for the next wave of P2P litigation.” Separately, David Post points out the justices’ split on the meaning of Sony.

At the WSJ roundtable, Michael Geist writes “BitTorrent may well have far less evidence of purposeful culpable expression, even with knowledge of infringement” and Ernest Miller writes ” I think that the Court has done a pretty good job of pre-empting the possibility of much legislative action in Congress.”

At the Picker MobBlog, Jessica Litman says “Given the Court’s unanimity, I’m impressed by the lack on consensus on what the Sony standard means, these days.” Doug Litchman should be happy with the favorable citation to his work and the general Supreme Court buy-in to his argument that intermediaries should take reasonable steps to avoid harm caused by their users, but he’s not–because a thoughtful future defendant can avoid usig marketing that would trigger the inducement standard. He writes: “Surely the Court realizes that well-advised bad actors rarely leave smoking guns lying about. Hence the victory here looks hollow.”

The EFF released a press release. Fred von Lohmann says “Today the Supreme Court has unleashed a new era of legal uncertainty on America’s innovators…The newly announced inducement theory of copyright liability will fuel a new generation of entertainment industry lawsuits against technology companies. Perhaps more important, the threat of legal costs may lead technology companies to modify their products to please Hollywood instead of consumers.” The press release continues “StreamCast is confident that it will pass muster under the new, multi-pronged test.” I’m not so optimistic on this one!

William Patry writes: “I view the Court as having punted: they decided mainly an issue that wasn’t in front of them (inducement) and didn’t decide the one that was, the effect of Sony in the Internet era.” He also shred the seeming unanimity of the case, commenting on the deep divide between the concurrences: “I think it greatly undermines [the case's influence], resulting, as predicted in a muddied, murky future.”

Fred von Lohmann weighs in with a standalone blog post. On inducement, he writes “the Court’s opinion may lead lower courts to conclude that once you find an overt act, however small, virtually everything else becomes relevant to divine your “intent.” That would be a bonanza for entertainment lawyers eager to foist huge legal costs on defendants. Reminiscent, in some ways, of the securities class actions that have bedeviled high tech companies for years.” Lots of other good comments–check it out.

Ina Fried at News.com takes a stab at winners and losers. Among her losers:

* eDonkey, LimeWire, Kazaa and others of their ilk–I do think some of these services seem like logical candidates to be sued next, especially to the extent they can be tainted by a Napster association

* MP3-only devices–I think this is a good example of someone who may be affected by their marketing. I remember Apple’s marketing from a while back of “Rip. Mix. Burn.” I think a marketing message like that from an MP3-only device could be intensely problematic.

* Discount music and movie lovers–I’m not sure if discount lovers will be bummed, but lovers of free copyrighted material may have to work a little harder than they have in the past.

Derek Slater at the EFF asks what is inducement? He writes that the doctrine allows “copyright holders and courts to second-guess every decision an innovator has made. Every marketing campaign, every design choice, every business plan, every document concerning how the software might be used are potentially fair game.” All of this is true, but this isn’t new–this is copyright law generally, and in the absence of a fact-independent safe harbor (like 47 USC 230), all of these questions are generally relevant in most types of lawsuits. He hits the mark better when he pokes fun at Friendster for having the seemingly problem phrase “-ster” as part of its name. I might add Monster.com to that list.

A Reuters story quotes Raymond van Dyke as saying that the Supreme Court had to reach this decision: “The justices really could not sanction the wholesale destruction of the content industry.” Wayne Rosso laments “The bottom line is that consumers are going to have to get used to paying for their music. Period.” This is not literally true of course; music producers can choose to release music for free, and plenty of already-illegal file-sharing will continue to take place irrespective of this ruling.

Susan Crawford praises the opinion. She thinks the inducement standard is relatively high: “If you’ve got a stated intent to help others infringe, and a bunch of “bad” ads, and lots of other evidence of culpable intent, and THEN someone writes to you and encourages you to adopt their filtering technology, and you don’t — well, then you might be liable for inducement.”

Declan reports that Congress doesn’t seem interested in an immediate legislative response to the case.

Dawn Kawamoto at News.com tries to show how start-ups might have problems raising money. Only time will tell, but I’m skeptical about this–business investing is filled with risks, and the risk of being sued for copyright infringement is just one of many risks.

AP story wonders about the impact on technological developments. It says “Might a broadband provider’s claim of “faster downloads” be perceived as an inducement to steal copyrighted material? Will innovative startups have to hire legal teams to review every aspect of a business before it even incorporates?” But then it also says “most major technology companies declined comment, either saying they were studying the decision or did not see how it applied to their businesses.”

Another good post from Doug Lichtman, this time saying: “The more I read, however, the more I think this looks like a loss for everyone — or, worse, everyone except the determined bad actors.”

Mark Schultz writes: “one fortunate aspect of today’s decision. The Court’s holding focuses on “bad actors,” not “bad technology.”” As a result, he predicts that BitTorrent and its creator should be safe, but commercial enterprises built on top of BitTorrent may not be.

Another good post from William Patry: “Grokster raises to me serious issues about the ability of the Court to deal with hard copyright technnology issues.” My only observation is–you mean you had faith in the court’s ability to deal with hard copyright cases prior to Grokster???

Mike Madison pokes at the meme that Grokster will reduce innovation. He writes: “Well, of course it will chill innovation. That’s the whole point of intellectual property law, isn’t it?” I had been formulating the exact same thoughts; Mike nails it before I can write them up.

If you want to relive the battle, the Copyright Office has posted all of the amicus briefs filed in the case.