- The Washington Times - Monday, March 14, 2005

This month, the Supreme Court will begin hearing arguments on a case that could profoundly affect both the protection of intellectual property and Internet-based technological innovation. In Grokster v. MGM, the justices will have to come to a judgment that bolsters either intellectual property protections or the playing field for innovation, or makes some accommodation to reasonably strengthen both.

We recognize both the value of intellectual property protections and innovation to society, and feel there are some remedies, based on principle and available technologies, that could defend the former without undermining the latter.

Grokster is a technological platform that allows people to share data with each other on the Internet. Grokster allows the sharing of home videos, documentaries and, not incidentally, copyrighted material. In fact, about 90 percent of Grokster “traffic” involves free, and therefore illegal, sharing and copying of copyrighted material. Grokster, in fact, has been encouraging such infringement. There is broad consensus that Grokster therefore has been a bad actor. The question remains, though, should the court take action against Grokster if its platform can be used for infringement, even if the technology can also be used for other file-sharing, non-infringement purposes?

The defenders of Grokster have pointed to the Sony-Betamax precedent, which found that if a technology has broad non-infringement applications, such as the Betamax did, the court should not penalize the technology makers for the infringement others have used it for. Grokster, these groups contend, does offer such broad, non-infringement uses.

Still, Grokster is distinct from Sony’s Betamax, in that its business plan is fundamentally oriented around infringement. Grokster not only makes a profit from the rampant violations of copyrights, it also has actively encouraged such theft. “It’s not the technology that’s the issue, it’s the business model,” noted Jim DeLong, senior fellow at the Progress and Freedom Foundation. “When the business model is encouraging infringement and relies on it, it’s fair to hold them liable,” he added. That combination of both encouraging and relying on infringement is the key. If the court cited such dual criteria in its decision, the ruling would protect technological innovators that create a product that is not geared toward infringement, but is later used for violations, due to the resourcefulness and unscrupulousness of its users.

Holding Grokster liable does not need to entail a closing down of its peer-to-peer network. The court could decide to require Grokster to implement filters or other technological devices to allow for the sharing of material that is not under copyright, and permit only the fair-use of copyrighted material, allowing, for example, users to take part of a song or video for use in their own creations, such as homemade documentaries. The filter also could allow users to purchase an entire song or movie, and even to sample such material before making a purchase. Many defenders of Grokster have argued that requiring such a filter would necessarily chill legitimate technological innovation, but they have failed to present persuasive arguments supporting that claim.

For the media companies, though, a triumph in the Grokster case will not guarantee victory over infringement. The motion picture and recording industry could still have to contend with savvy Internet users who can find their way around filters, with peer-to-peer providers who could operate overseas and therefore take no action to restrict copyright infringement and with potential peer-to-peer providers here who are not making a profit and therefore have no business plan they could be held liable for.

The media companies will ultimately be forced to adapt to peer-to-peer and other kinds of technological innovations, just as they did with the advent of the radio, the Betamax, the VCR, DVDs, CDs and iPods — even copying machines. The court should on principle, though, give no ground to those who would steal private property.

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