- The Washington Times - Tuesday, March 29, 2005

The Supreme Court heard arguments yesterday about whether Hollywood studios and record labels can sue companies that make the software that allows Internet users to download music and movies illegally, a case poised to help define how consumers choose their entertainment in the digital age.

The justices, during their questioning of the lawyers arguing the case — considered to be one of the most important copyright cases in history — expressed concerns that such lawsuits could stifle technological innovation.

They also questioned the merits of allowing software makers to build their businesses upon acts of copyright infringement.

Justice Stephen G. Breyer asked Donald B. Verrilli Jr., the attorney for the Hollywood studios and the record labels, how lawsuits like those the industry wants to pursue would have affected past inventions.

“Would we ever have a VCR? Would we have the Xerox machine? Would we have an IPod? Or for that matter, the Gutenberg press? … It could be in each of those cases there would be vast amounts of infringing uses that are foreseeable,” Mr. Breyer said.

“My answer to those questions is yes, yes, yes and yes,” Mr. Verrilli said.

The inventions Mr. Breyer cited all have legitimate uses, but the “file-swapping” software that can download music and movies exists primarily so users can obtain copyrighted material without paying for it, Mr. Verrilli said.

Theoretically, file swapping offers “some really excellent uses” that are legal, Mr. Breyer said.

Justice Antonin Scalia said a ruling for the entertainment companies could mean that if “I’m a new inventor, I’m going to get sued right away.”

But another justice, Anthony M. Kennedy, asked whether an innovator can use “unlawfully expropriated property as part of the start-up capital for his project. … That seems wrong to me.”

The industry wants to use lawsuits against software makers as another tool to battle piracy.

The record labels have sued about 9,100 individual file-swappers since 2003, settling with about one-quarter of them. Music sales rose slightly last year after years of decline.

The film industry in November began suing people who swap illegal copies of movies online. Officials have declined to specify how many lawsuits have been filed.

In an interview with editors and reporters at The Washington Times last week, Dan Glickman, the president of the Motion Picture Association of America, said lawsuits are needed, even if they deter just a few people.

“We’ve got to enforce what rules there are,” he said.

Metro-Goldwyn-Mayer Studios Inc., representing the entertainment industry, brought the case before the high court.

Mr. Verrilli asked the justices to overturn a lower-court ruling that said Grokster Ltd. and StreamCast Networks Inc., the parents of two of the most popular file-sharing services, are not liable for illegal downloads using their software.

Richard G. Taranto, the lawyer representing the software makers, cited the high court’s 1984 decision in Sony Corp. v. Universal City Studios Inc., which held that companies that sell videocassette recorders are not liable for users’ copyright infringements.

If at least half of a software product’s uses are legitimate, it should be protected from lawsuits, Mr. Taranto said. He questioned the statistics quoted by Mr. Verrilli that suggest file-swapping software is overwhelmingly used illegally.

The court is not expected to rule until June.

In remarks to reporters after the hearing, representatives from both sides said they were encouraged by the tone of the justices’ questions. Demonstrators from both sides marched in front of the court.

The justices also heard an hour of argument about whether Time Warner Inc. and other cable TV providers should be forced to open their Web-access networks to rival Internet service providers. The court is not expected to rule until later in the year.

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