BitTorrent makes the news once again, this time as a trademark enforcer. ZDNet reports that the company formed by BitTorrent creator Bram Cohen, BitTorrent, Inc., will begin asserting trademark rights in BITTORRENT against software developers who make unauthorized use of the mark in their branding and marketing. Those who want to use the mark will need to gain approval, pay a nominal fee, and sign a license agreement.

Some see BitTorrent’s actions as ironic. The Register subtitles its story on the news “MPAA stifles laugh” and leads with “BitTorrent – which usually finds itself reading lawyers’ letters rather than writing them – is going to start taking legal action rather than just being its subject.” It is indeed tempting to see this as yet another amusing attempt to build a mainstream business on the notoriety of filesharing, as Bertelsmann has done by turning Napster into a paragon of copyright compliance. Nevertheless, as I have noted before here and here, Bram Cohen and BitTorrent have always been a bit different from the Groksters and Napsters of the world. Cohen has always maintained a fairly convincing and consistent line that BitTorrent was intended and should be used for non-infringing uses only.

What is the story with this latest news regarding trademark enforcement? Most likely, this is an attempt to help bolster the legitimacy of the powerful BitTorrent brand. BitTorrent is well known, but also notorious. BitTorrent, Inc., is seeking to become a legitimate, commercial distributor of movies and other content, having raised $8.75 million in VC money to “to improve its infrastructure and make it more appealing to Hollywood.” As BitTorrent’s COO Ashwin Navin says, “The piracy business is not something anyone can make money on. We want to distribute paid and ad-supported content, using this technology.”

If BitTorrent wants to be attractive to Hollywood, it needs to makes its name something other than a synonym for piracy. Can a cool, cutting edge brand with outlaw mystique successfully transform itself into a Hollywood-friendly service? It will be interesting to see whether BitTorrent can pull off such a re-branding.

BitTorrent’s official reason for policing its trademark is to prevent adware and spyware distributors from exploiting its popularity. As I said, I suspect legitimacy is a greater motivation than fear of adware, but quality control likely does play a role in this policy. In fact, trademark enforcement is nothing new in the open source community, as Linus Torvalds also polices the use of LINUX. The Linux Mark Institute licenses use of the LINUX mark. The terms are not onerous, but they certainly allow Torvalds to control the Linux “brand.”

The use of trademarks in the open source community is quite fascinating. It had not occurred to me before (but I’m sure that it has to many others), but I see clearly now that the control of a trademark may be at least as important as licensing in coordinating development and maintaining the quality of an open source program. Any developer can take Linux or BitTorrent code and adapt it to their purposes. But if they are prevented from using the original name, then they are less likely to cause confusion, perceived interoperability problems, or hurt the reputation of the program.

I wonder, however, whether BitTorrent is a bit late to the game in enforcing its rights. At this point, “BitTorrent” may have become generic for filesharing programs that employ the type of distributed technology originated by Cohen.

The post BitTorrent to Enforce BITTORRENT Trademark appeared first on Technology & Marketing Law Blog.

In a truly newsworthy item, Billboard reports that music publisher Warner/Chappell “privately and publicly” apologized to Walter Ritter. Ritter is the creator of PearLyrics, an software app for iPod users that downloads song lyrics from lyrics sites (which post lyrics without permission). Earlier this month, Warner/Chappell threatened Ritter with litigation for distributing his tool, and he pulled it from distribution.

Ritter posted the apology on his site:

Joint Statement of Walter Ritter, pearworks and Richard Blackstone, Warner/Chappell Music:

“Based upon our common goal of helping consumers enjoy the song lyrics they want – and our common belief that technology can help to transform the music industry to the benefit of consumers and artists alike – we are committed to working together to provide consumers a convenient, legal way to find accurate song lyrics.

The goal of Warner/Chappell’s prior letter to pearworks was to gain assurance that pearLyrics operated according to those principles. However, in both tone and substance, that letter was an inappropriate manner in which to convey that inquiry. Warner/Chappell apologizes to Walter Ritter and pearworks.

Our solution will adhere to our shared belief that songwriters must be fairly compensated for their work and that legitimate web sites with accurate lyrics must not be undermined by unlicensed web sites.

We look forward to working together, and to helping to advance the evolution of the music industry cooperatively for the benefit of consumers and artists alike.”

Did this apology come about because I blogged a couple of days ago that it would be good business for the music industry to behave more reasonably? Of course not. I’m an academic. Nobody listens to me. Ritter credits EFF super-litigator Fred von Lohmann and his open letter to Warner/Chappell for persuading them to behave more reasonably. Nice work, Fred!

Of course, the music industry has not changed its ways overnight. In the article linked above, Billboard also talked to Lauren Keiser, President of the Music Publisher’s Association. He has not changed his tone much from my report the other day, where he called for jail time for operators of infringing lyrics sites. When asked if he would consider working with lyrics sites, he replied:

he is not inclined to approach these sites first as potential partners. “If someone was robbing your bank,” he asks, “would you go to them and say, ‘Hey, let’s split the cut?’”

On the other hand, Keiser shows some signs of coming around. Since he announced the litigation campaign, he has received many e-mails suggesting ways that MPA members might cooperate with lyrics sites for mutual benefit. He concedes that some

came up with some good ideas. “I’ve printed out a number of them, which I’ll show the board next month,” he says. “I think our members would be happy to support sites that want to help them exploit writers.”

I’m delighted to see that somebody from the music industry realizes that the best thing for all concerned is less litigation and more exploitation.

The post Man Bites Dog–Music Publisher Apologizes for Overreaching C&D appeared first on Technology & Marketing Law Blog.

Treating your customers well is always a good idea. Treating your customers well is a very good idea if they don’t really need your product. Finally, treating them well is absolutely essential if they don’t need your product, but can choose to get it anyway without paying you. The music industry is in the latter position, but just doesn’t seem to care.

A case in point is the burgeoning crusade of music publishers against lyrics web sites. For a long time, lyrics sites have provided a nice little service for music fans and musicians looking for lyrics. They are incomplete, often inaccurate, and plagued by popups. Nevertheless, they serve a demand that the music industry has failed to meet. I easily can imagine that a music industry lyrics site could provide consumers with a superior experience while providing ad revenue to publishers and songwriters. Unfortunately, rather than providing a superior alternative, the music industry is starting its fight with lawsuits. It’s the filesharing story all over again.

As if this weren’t deja vu enough, the legal campaign is accompanied by obnoxious, overblown rhetoric. It must be a badge of honor for entertainment industry trade association executives to become known for extreme statements. Lauren Keiser is president of the Music Publisher’s Association. Apparently, he hopes to make “Lauren Keiser” and “MPA” terms of obloquy and horror among bloggers and Free Culture types just like “Hillary Rosen,” “RIAA,” “Jack Valenti,” and “MPAA.” Well, why not? Rosen and Valenti have both retired, so the position of Public Domain Enemy Number One is vacant. As the BBC reports, Keiser makes his case as follows:

MPA president Lauren Keiser said he wanted site owners to be jailed.

He said unlicensed guitar tabs and song scores were widely available on the internet but were “completely illegal”.

Mr. Keiser said he did not just want to shut websites and impose fines, saying if authorities can “throw in some jail time I think we’ll be a little more effective.”

Jail? Does he know something we don’t? Are lyrics sites fronts for terrorist activities? Sarcasm aside, I’m sure Keiser as an industry insider knows some things we don’t about lyrics sites and certainly has stronger feelings than most. He should keep those differences in perspective in mind. Most people don’t get where he’s coming from. He sounds a little unhinged, which is a bad thing for one of the public faces of the music industry. Unhinged is a fine thing for a political talk radio show host, but should it be part of the job description of a trade industry executive? Unfortunately, it probably kind of is part of his job. The industry pays his salary, they’re worried, so he needs to show them he is fighting for them.

The music industry would do well to consider whether such actions and rhetoric really serve its interests. In a forthcoming article to be published in the Berkeley Technology Law Journal, Fear and Norms and Rock & Roll: What Jambands Can Teach Us about Persuading People to Obey Copyright Law, I contend that the music industry could partly alleviate its infringement problem by treating music fans better. While this conclusion may sound a bit pie in the sky, it is based on social science research: When people are treated well, they reciprocate by cooperating and playing by the rules. When people are treated poorly, they reciprocate by punishing those who treat them badly. Now that compliance with copyright is largely voluntary, the music industry needs to treat its fans well. Build good relationships, and people are less likely to infringe. Anger fans, and people will shrug off the illegality of unauthorized filesharing.

The music industry would have been better off if it had led with something like iTunes and then followed with suits against illegitimate competitors. At first, it may have seemed to be suicidal to compete with free, albeit illegal services. The industry’s attitude was understandable: We need to lock up our content and eliminate the illegal competitors. Only then can we really succeed online. Luckily for them, Steve Jobs saw things differently. He explained the iTunes strategy in a 2003 Rolling Stone interview:

Our position, from the beginning, was that 80% of the people stealing music online don’t really want to be thieves. But that it is such a compelling way to get music: It’s instant gratification. You don’t have to go to the record store; the music’s already digitized, so you don’t have to rip the CD. It’s so compelling that people are willing to become thieves to do it. And to tell them that they should stop being thieves — without a legal alternative, that offers those same benefits — rings hollow. We said: We don’t see how you convince people to stop being thieves, unless you can offer them a carrot — not just a stick. And the carrot is: We’re gonna offer you a better experience … and it’s only gonna cost you a dollar a song.

Since then, iTunes has produced over a billion legal downloads. While iTunes has not eliminated illegal filesharing, it has certainly proven that a lot of people are willing to pay for a legal service even when free illegal alternatives exist. People are willing to cooperate, but gaining that cooperation requires decent treatment. Give people a legal alternative that is convenient and reasonable. Put aside the inflamed rhetoric and technological lockdowns, and focus on the positive.

As the cliché goes, hindsight is 20-20. The success of iTunes was not necessarily obvious. But now that it has occurred, it would be foolish not to draw some lessons. Before the music industry launches its new battle against lyrics sites by following the old script from its filesharing battle, it ought to consider a more reasonable approach. Start by providing a legal alternative–give people a nice, comprehensive, accurate site that shows up at the top of the search engines. If they do that, they likely will have solved a lot of their problem before they even start to worry about enforcement (sans the apocalyptic rhetoric and calls for jail time).

The post We Hate You, Buy Our Stuff appeared first on Technology & Marketing Law Blog.

Not getting what you want as a consumer is bad news (of course, sometimes you get what you need), but failing to supply what consumers really want is a big mistake for marketers. Sometimes it’s hard to figure out what consumers are thinking, but sometimes it seems even harder to figure out marketers. Case in point: The new Rolling Stones album will be marketed as a $40 flash memory card as well as an ordinary priced CD The music industry has been down on its luck, and I know you all sympathize, but what are they thinking? For the extra $25, the press release tells us (along with a lot of other useless information supposed to fire my imagination) that you also get (1) copy protection and (2) bonus material. The bonus material is . . . drum roll please . . . previews of other songs in the Stones catalog. Wow. They’re going to sell dozens of these. (By the way, SanDisk has chosen a truly hideous trademark for its new format: GRUVI. The “u” has a gratuitous umlaut to make it all the more shudder inducing.)

I understand that the music industry needs to minimize its plight, but this is not a useful compromise solution. Kids are different these days; they don’t want to buy music that is locked onto a tangible medium. If the industry wants to keep content under its thumb with DRM, it needs to come up with a value proposition that gives me a reason to switch to new media. I’m no schoolboy, but I know what I like. My current CD player suits me just fine. My computer on which I’ve stored 100s of CDs and live concert recordings and hooked into my receiver via a digital optical cable is also satisfying.

Lame Stones lyric references aside, if the music industry wants consumers to switch to a new format in order to allow it to have DRM, then the music industry needs to give consumers something in return. The upgrade needs to be at least as compelling as the difference between video tapes and DVDs. In that instance, the copy protection went along for the ride with a great new product, rather than driving the new product.

In a big picture sense, it is interesting to watch the music industry struggle to find the right business model. I remember that as an undergraduate I perceived capitalism as a system of ruthlessly efficient competition. An education in economics did little to dispel that perception. A few years in the business world cured me of that idea. I came to realize that winning in the marketplace rarely requires heroism worthy of an Ayn Rand novel; rather, one usualy need merely be less incompetent than everyone else. Actors do not have perfect information. Moreover, within a corporation, individuals often are just as (or more) worried about satisfying internal constituencies rather than consumers or shareholders. Thus, an album is issued on a $40 “gruvi” (a deceptively misdescriptive trademark if I ever heard one).

The music industry will probably eventually get it right, but it may take an accident first. Economist Stan Liebowitz discussed this problem a few years ago in a Salon interview regarding filesharing. As Liebowitz points out, for years the movie industry priced videotapes too high–around $100. They thought that there was no market for consumer purchases. Then one year, they did a holiday promotion where E.T. was priced affordably. People shocked the industry by snapping them up. Thus was born one of the movie industry’s most important revenue streams, but it took the movie industry a while to figure this out.

Liebowitz notes that while we are going through these changes, they seem to take a long time. Historically, however, they appear to happen fairly quickly. Liebowitz hazarded that it might take the music industry a decade to find its footing (that was three years ago). It remains to be seen whether filesharing will allow the luxury of trial and error.

Still, you can’t say they never tried.

The post You Can’t Always Get What You Want appeared first on Technology & Marketing Law Blog.

After a busy summer finishing a paper on copyright and social norms (thanks to Eric for the plug!) and dodging angry deer on SIU’s campus, I’ve returned for more guest blogging.

Sooner or later, a blog on marketing and technology should link to Grant McCracken’s blog, which is called This Blog Sits at the Intersection of Anthropology and Economics. McCracken is a very interesting and provocative anthropologist who studies popular culture and marketing. His work is uniquely insightful. He takes pop culture and marketing seriously, patiently seeking to understand it on its own terms, rather than jamming it into some ready-made theoretical box.

His most recent post, Disney and Other Mysteries of the Brand, talks about the special power of the Disney brand. McCracken thinks that Disney’s new CEO, Robert Iger, is mistaken in his plans to allow downloads of Disney movies. McCracken believes that there is something special and unique about the Disney brand that makes people want to collect and own tangible embodiments of it. As McCracken puts it: “There is something about the thing itself that we, in marketing and in anthropology, do not fully understand. There is something about having your hands on the movie, even when this comes to you in the form of a cheesy plastic package. Parents and kids want their homes stocked with Disney favorites and they want them in a material form. We’re not sure why.” As is often the case with McCracken’s work, this post inspires several different interesting lines of thought.

The thought I’m most interested in for the moment is the notion that Disney is a uniquely magical brand. Disney is one of those brands that is so infused with powerful positive associations that people really want to “possess” it–t-shirts, dresses, mugs, DVDs, etc. Lots of companies slap their trademarks on promotional junk, but people go out of their way to buy Disney stuff. There are a handful of other brands with that kind of power–for example, Coke and Harley Davidson.

If protection against trademark dilution is at all justified, it is justified for “magical” brands like Disney, Coke, and Harley Davidson. But I’m not sure the law has really figured out how to define that special “magic” or how to protect it. The concepts of “fame” and “distinctiveness” are poor stand ins for the special magic that Disney possesses, and the cause of action of “dilution” takes imprecise aim at the harm that special brands seek to prevent.

I have to confess: I love Disney. Other IP profs may see me as having an “Anakin” moment here, since Disney has emerged as symbolic public enemy number one for scholars concerned with the erosion of the public domain. I’m sorry, but Disney is special. I have a Mickey Mouse print in my office. Sure, in a nod to obligatory Gen X irony, it is a reproduction of the famous Air Pirates parody, so Mickey is depicted as a drug running airplane pilot. But it’s still Mickey. Like so many other people, Disney has special associations for me. DISNEY—I’m a little kid, plunked down in a movie seat between my parents, and utterly entranced. DISNEY–It’s 1976, I’m on a vacation to Disneyworld for which my family saved for three years. It’s worth every penny. DISNEY–It’s now, and every time I share a new Disney DVD with my little girls, they light up with innocent joy. These kinds of associations are incredibly powerful. I suspect they help to explain why companies like Disney feel so inclined to seek especially strong protection for their creations, and why legislators and judges are often inclined to grant it.

When a client like Disney comes to a lawyer and complains that somebody is misusing their trademark, they likely don’t have concepts like trademark dilution in mind (unless they are in-house counsel). Since lawyers are problem-solvers rather than psychologists or philosophers, we simply use the tools that are most likely to get the job done. We construct a complaint that asserts our client’s trademark is “famous” and that the competing use will “cause[] dilution of the distinctive quality of the mark.” If it results in the offending party stopping, we are happy and so is the client.

Outside of the hubbub of litigation, however, it is worthwhile to pause to consider whether dilution really addresses the harm the client feels in such a case. More important, it is interesting to consider why legislators and judges are willing to give extra protection to strong brands. I suspect that trademark holders and policymakers are motivated by something a bit deeper than protecting the “distinctive quality” of a famous mark. Economic interests certainly figure into the explanation, but they hardly account for the vehemence with which some assert the need for such protection.

Certain brands have a special hold on our imagination. It likely takes an anthropologist like McCracken to explain why. If one takes brands seriously as a cultural phenomenon, one can see that some have acquired a talismanic significance. Their owners and others (like legislators) object to their defilement like an earlier culture might object to the mishandling of a ceremonial object. Sometimes we lawyers describe such a strong trademark as having “commercial magnetism.” That term is better than some alternatives, but I have often suspected that the term “mojo” might be far more apt. Like Austin Powers complaining that Dr. Evil has stolen his mojo”, the trademark owner complains that a diluting use is a theft of his trademark’s mojo.

Yes, this may take us far a field of typical legal analysis and me way out of my area of expertise. Nevertheless, I think it explains some of the impulses underlying support for dilution. We ought to ask ourselves, however, whether our courts really ought to be in the mojo protection business. Disney and its employees are emotionally (and, of course, economically) invested in Disney’s marks. Many of us are also emotionally invested. That is why even a non-confusing, non-tarnishing use of a powerful brand may seem like a transgression worth addressing. As for a tarnishing use—one that associates a beloved brand with something scandalous—that seems even more necessary to redress. These impulses are understandable, but do we need to vindicate them legally? Because I perceive dilution as having irrational roots, I have always found its justification to be dubious. At the very least, perhaps we should restrict dilution not to marks that are just famous, but also require that they have “mojo.”

I’ll leave the development of my multi-factor test for determining mojo to a future law review article.

The post Stealing Mickey’s Mojo appeared first on Technology & Marketing Law Blog.

Ernest Miller, Ed Felten, and I (clearly the lesser blogger of the three) have been blogging about what happens to BitTorrent after Grokster.

Ernie Miller has discovered a circa 2001 cybermanifesto in which BitTorrent creator Bram Cohen declared himself a “a technological activist” who “further[s] my goals with technology. I build systems to disseminate information, commit digital piracy, synthesize drugs . . .” (emphasis added). Ernie has determined that the cybermanifesto appears to have been posted around the time Cohen was first working on BitTorrent. [Update: Bram Cohen has revised his site to say that the manifesto is a parody, first posted in 1999] In the words of an esteemed philosopher, “D’oh!”

This appears to be the work of a young man (he would have been about 26), written in the Estimated Prophet style of serial cyberdeclaration writer John Perry Barlow. I’ve written things I wish I could take back in the digital era, but I’m glad my own days of impetuous youth were drawing to a close by 1994. An aggressive lawyer suing Cohen and BitTorrent, Inc. would (will) be sure to make the most of this statement.

The question is, just how much can be made of this statement? Ernie Miller asks: “How far will a lawsuit under the active inducement standard as articulated in Grokster go with this statement? Will this open the door to discovery? Will this make the addition of search engine (with advertisements) look like a bad act? Will it make trackerless BitTorrent look like a bad design decision?” Those are all great questions, probably of some concern to Bram Cohen and his friends. I wish him well, especially since he has created wonderful and beneficial technology, apparently with the best of motives, notwithstanding this one particular statement.

I don’t have the time to consider and offer my answers to all of Ernie’s thoughtful questions. I would like to make one point: There is a difference between Bram Cohen and his company, BitTorrent, Inc., and BitTorrent the technology. The fate of BitTorrent as a technology should not depend on Bram Cohen’s intent in developing it. I think that if courts develop the Grokster standard the “right” way (the way I would like), they will draw a distinction between the acts of people and technology. Like the old saw about guns and people, we should say that technology doesn’t commit infringement; people use technology to commit or induce infringement. Technology should not be suppressed just because a particular developer or distributor induced infringement. The rare exception to this principle would be a piece of technology (e.g., a satellite descrambler) that has no substantial non-infringing use. (Of course, Justice Ginsburg and two other justices disagree with this interpretation of Sony (Footnote 1 of the concurrence)).

A positive development from Grokster would be to move the focus of the contributory liability debate regarding technology from how end users employ technology to the actions of its promoters. Sony has caused too much focus on how the technology is used by end users after the fact. While actual or potential use of technology by end users is a reasonable basis for a safe harbor from liability, it can be a troublesome basis for imposing liability. After the fact, use-based tests for liability, like Judge Posner’s cost-benefit balancing test in Aimster suppress innovation by making life incredibly dangerous for developers. You don’t know if you are liable until you see what people do with your product, and if that use changes, you could later become liable. The Grokster inducement standard is more likely to create certainty, because one’s liability is based on one’s own actions.

The unfortunate thing is that the Grokster opinion leaves room for a plaintiff to bootstrap inducement from the later actions of end users. If the standard evolves in this direction, it will be harmful. We must avoid this “bootstrap effect” to maintain access to innovative technology. Even if Bram Cohen had “bad intent” in developing BitTorrent (I don’t think he did), all subsequent distributors of BitTorrent should not be accountable for his actions or the actions of some end users. Such a distributor should be able to avoid liability, so long as substanstatial non-infringing uses are possible and the distributor does not actively induce infringment.

The post Shocking Revelations About BitTorrent appeared first on Technology & Marketing Law Blog.

Ernest Miller notes that I should address the new trackerless BitTorrent and BitTorrent search created by Cohen. He was right. So, here goes.

As Wired News reported a few weeks back, Bram Cohen and fellow developers released two innovations to BitTorrent: First, a BitTorrent search engine, and second a trackerless version of BitTorrent. These innovations create toughter questions than the original BitTorrent.

First, the search engine is BitTorrent’s first commercial venture, as it accepts advertisements. If you type “star wars” into the search engine, you find links to several torrents, one of which apparently is a pirated version of Revenge of the Sith. (Here’s a link to the search, but don’t expect the results to stay the same.) What I found interesting is that Sith was only one of the results. The rest appear to be for fan films, which Lucas allows (with occassional equivocation) fans to create and distribute. So, most of the results I found were legal. I suspect this relatively clean result means that Cohen et al. are policing the links. (I may have chosen a biased example, since the BitTorrent folks must know that BitTorrent use in the pirating of Sith has made the movie industry very angry.)

It appears that the new BitTorrent search engine would qualify as an “information location tool” under 17 U.S.C. § 512 (d). This section of the Copyright Act provides a safe harbor from liability for search engines and similar services that comply with its provisions. For qualifying services, it sets up a notice and takedown regime. The problem is that section 512(d) is not an absolute shield. To qualify, the service provider must not have “actual knowledge” of infringement or “aware[ness] of facts or circumstances from which infringing activity is apparent.” If BitTorrent.com becomes an open and notorious source for links to infringing torrents, it could face trouble. At the very least, they are likely to spend a lot of time taking down links, as Mark Lemley notes in the Wired article.

What probably will matter most in the long run is the behavior of Cohen et al., rather than how the search engine functions. My hope (and I believe a reasonable reading of Grokster) is that Grokster establishes a principle that people, rather than technologies, do bad things. Looking at the three key “bad behaviors” from Grokster (see my earlier post), we can see a roadmap for “good behavior.”

The first question is whether BitTorrent.com is directing its promotion its service to large numbers of infringers. As detailed in my earlier post, Cohen and his fellow developers have a long and credible history of building and promoting BitTorrent for legal use. They continue to talk the right talk. As Wired reports,

“the company is eager to highlight its utility as a completely lawful program for furthering free speech. That’s the vision that drives the company, says [COO Ashwin] Navin — now anyone can publish their own movies, music or software, because BitTorrent all but eliminates expensive bandwidth costs.”

Cohen et al. will need to be very careful not to promote illegal filesharing, but they have done a good job so far. They have control over the message they present–they need to maintain a steady, moderate line of promoting legal uses. Greedy talk of how people can download lots of music or revolutionary talk about overthrowing the music industry would only get them in trouble.

BitTorrent.com can also control how it looks with respect to the third “bad fact” from Grokster–will its business model depend on attracting lots of downloaders of illegal material? In many respects, the new search engine appears to be a lot like Google (in substance and appearance). It helps people find stuff; the stuff in this case happens to be torrents. The question is what is the affect if some (or most) of those torrents happen to be illegal? If BitTorrent keeps its search pages clean enough to comply with the Section 512 safe harbor described above, then it likely is fine. If it does not, then it likely will be known as a vast collection of infringing links, and thus its business model will appear to be based on inducing infringement.

The second of the “bad behaviors” in Grokster is more troubling: The inference of bad intent from the failure to create filtering mechanisms. As Susan Crawford, and others have pointed out, footnote 12 of the opinion seems to discourage the creation of duty to filter: “Of course, in the absence of other evidence of intent, a court would

be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the Sony safe harbor.” If that understanding holds, then the marketing, promotion, and business model will be the key factors in avoiding inducement.

The new trackerless version of BitTorrent presents similar considerations. To put it simply, this innovation makes it easier for people to set up torrents on their own web sites and blogs. Torrents thus may become even more decentralized and harder to find. Arguably, as Ernest Miller points out, this is a design decision that facilitates infringement, so a court might infer intent to induce. As I noted above, footnote 12 of the decision likely makes the marketing and business model aspects more important than the design aspects. As I have said, Cohen et al. have always placed the right emphasis on legal sharing and continue to do so, describing the trackerless version as embodying “our hope that BitTorrent will enable more independent web publishing.” As Ernest Miller puts it, “Bram Cohen must remain purer than Caesar’s wife.”

Ultimately, none of this will stop BitTorrent’s developers or any other developer from getting sued. As I told my clients in practice, if somebody wants to sue you, they will.

UPDATE: See here for further blogging on “shocking” revelations about BitTorrent.

The post More on BitTorrent and Grokster appeared first on Technology & Marketing Law Blog.

Thanks to Eric for the chance to guest blog here. And congratulations to Eric for predicting the decision right. He called it about a month ago–I was there, under a tree in front of the lodge at Zion National Park.

Now that the Supreme Court has spoken in Grokster, many are eager to know what happens next. Not what’s next for Grokster and Streamcast. They are yesterday’s news, doomed to be overwhelmed by phalanxes of music industry lawyers. No, the question is what will happen to BitTorrent, the next-generation filesharing program that one study claims now accounts for the majority of file sharing traffic and 35% of all Internet traffic.

BitTorrent and its creator, Bram Cohen, should be just fine. Some services that use BitTorrent to promote infringing file sharing for commercial gain, like the now defunct Suprnova.org, are most likely in trouble. The difference in results points to one fortunate aspect of today’s decision. The Court’s holding focuses on “bad actors,” not “bad technology.” In that respect the safe harbor of Sony still stands. (Whether the prospect of having to defend oneself as a “good actor” will stifle technological development is a subject for another post or a law review article).

Why are BitTorrent and its creator okay? I’ve researched BitTorrent’s development for a forthcoming article on copyright and the jam band community. Jam bands are bands like the Grateful Dead and its vast and diverse progeny who allow fans to record concerts and exchange the recordings legally. Cohen has said he developed BitTorrent in response to the needs of his friends in the jam band community who were legally downloading shows. One of the earliest version’s of the BitTorrent FAQ indicates it was being developed for legal trading by “etree” (the online community at the center of the jam band world). The FAQ reads:

“BitTorrent’s customer is etree. Etree is a loose-knit community of people who distribute live concert recordings online. They never charge money, and only distribute recordings of bands which give permission. Etree suffers from not having nearly as much upload offered as there is download demand, a problem BitTorrent is intended to solve.”

From what I have been able to determine, the files used to test BitTorrent during development were legally shared jam band files. Cohen’s innocent intent is significant under today’s ruling.

Today, the Court held that one could be liable for contributory infringement if for “distribut[ing] a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement.” The Court pointed out three notable pieces of evidence of intent: (1) Grokster and StreamCast attempted to capture and aggregate Napster’s vast audience of known infringers; (2) They did not attempt to filter infringing material; and (3) Their business model was based on making money by showing banner ads to large numbers of people. Cohen and BitTorrent (as a technology) come off looking pretty good.

First, BitTorrent looks far better than Grokster and Streamcast under the Sony standard. What the Sony standard is after today will be the question for some time. It appears that Justice Breyer and two others would definitely excuse a product like BitTorrent as there is a substantial non-infringing use (etree). One presumes that Justice Souter and two others probably would, or else they would have followed Justice Ginsburg’s lead in promoting a version of Judge Posner’s Aimster balancing test.

Under Justice Ginsburg’s more demanding formulation (which appears to have only 3 votes), BitTorrent might be in trouble. Would Justice Ginsburg go this far? Her opinion dismissed the evidence of the band Wilco using Grokster et al to distribute Yankee Hotel Foxtrot as merely anecdotal. (One would think that Yankee Hotel Foxtrot would have taught people to stop dismissing Wilco, but that’s another story.) Would she dismiss etree so quickly? Yes, BitTorrent is massively used to pirate movies, but the non-infringing use of BitTorrent is also substantial. It was developed for the jam band community for legal usage, and continues to foster thriving, well-policed legal usage in that community. I would hope that if faced with BitTorrent, Justices Ginsburg, Kennedy and Rehnquist would see one of the messages of today’s decision: Technology doesn’t commit infringement; people commit (or induce) infringement.

So, would Cohen and the other original BitTorrent developers be on the hook as inducers? Probably not. There appears to be no “clear expression or other affirmative steps taken to foster infringement.” With respect to the three key facts cited by the Court, they are quite different from Grokster and Streamcast’s developers. They did not attempt to aggregate or capture a pre-existing group of infringers. Quite the contrary, as they said “BitTorrent’s customer is etree,” a group of law abiding . . . Deadheads. They were not trying to make money by showing ads to infringers. While they did not attempt to filter infringing material, I would argue that the original intended users (etree) monitor torrents for legality and still do (banning the i.p.s of violators).

In sum, Bram Cohen and the original BitTorrent (as a technology) look pretty safe post-Grokster. BitTorrent’s unique history and the existence of the etree community are great protection.

Sites like the now defunct Suprnova, most likely are not. Such sites add a commercial layer on top of BitTorrent (banner ads). The commercial layer is not the problem; the problem is that they drive traffic by linking to infringing torrents. They also promote the presence of infringing torrents via ads and paid search engine placements. In short, they are the sort of bad actors that today’s decision wishes to reach.

UPDATE: Ernest Miller notes that I should address the new trackerless BitTorrent and BitTorrent search created by Cohen. He was right. So I did here.

UPDATE 2: See here for further blogging on “shocking” revelations about BitTorrent.

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