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Grokster Stalemate Forecasted - Broadcasting & Cable

Grokster Stalemate Forecasted

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Both sides in the Supreme Court case over Grokster and similar file-sharing networks have predicted that the legal battle will end in a draw, more or less.
The predictions came after oral argument in Hollywood's appeal to shut down the peer-to-peer Internet systems trafficking primarily in illegally copied movies, music and TV shows. In their comments to lawyers arguing the case, the justices indicated they were troubled by the prospect of shutting down a new technology with legitimate uses such as trading of content in the public domain, as well as of legal videogame samples creators offer to entice sales of complete versions. However, the justices also sounded reluctant to give a free pass to networks that, whatever the potential for legitimate use, today are used overwhelmingly to illegally distribute copyrighted content.

Justice Antonin Scalia suggested that legitimate new technologies could be shut down in infancy if their most popular uses initially are for illegal purposes, and the damaged parties go to court. "What I worry about is the lawsuit coming right out of the box," Scalia said. Several justices suggested that allowing copy-protection safeguards to overreach could have killed off other digital-media products such as Apple's I-pod for music files, for which significant pay services have been created.

"Neither side will have its prayers fully answered," said James DeLong, senior fellow of the Progress & Freedom Foundation, which supports keeping P2P networks free of liability unless they actively promote illegal copying. One possibility is that the justices will order the lower court to determine whether Grokster and its siblings actively induced users to abuse its system in order to swap content files illegally, and to also determine whether operators of the systems should pay damages.

The federal-appeals court in San Francisco ruled in August that Grokster itself was doing nothing wrong, because its file-sharing system has legitimate uses, and it was not storing illegal files on its own servers. Instead, the system allows swappers to trade files stored on their own computers.

But lawyers for the Motion Picture Association of America pointed out that 90% of the traffic on the file-sharing systems is illegal. "They have intentionally built up a copyright infringement machine," stated Donald Verrilli, who argued the case for MGM and the rest of the movie industry.

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