Grokster, StreamCast Lose

The Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the Internet, at least when the software companies take “affirmative steps to foster infringement.”

In a decision announced by Justice David H. Souter, the Court said: “We hold that one who distributes 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, is liable for the resulting acts of infringement by third parties” — that is, computer users using free downloading software.

A sweeping victory for music recording companies and movie studios, the ruling set the stage for a major legal assault on rampant file-sharing of copyrighted works by attacking the software designers — a much more promising legal avenue than suing infringing users directly.

The decision came in the case of MGM Studios v. Grokster, et al., 04-480.



65 Comments »



  1. Grokster Decision

    DECISION Grokster, StreamCast Lose (at 10:31 AM by Kevin Russell: “The Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the…

    Comment by Tech Law Advisor — June 27, 2005 @ 10:37 am

  2. Oh god no. There goes the 15 minutes of joy after the 10C ruling.

    Comment by Rahid — June 27, 2005 @ 10:37 am

  3. This is a sad day………

    Comment by Mike Dallos — June 27, 2005 @ 10:37 am

  4. Grokster Loses

    Via Scotus Blog: The Court rules against Grokster and StreamCast: The Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded fr…

    Comment by TalkLeft: The Politics of Crime — June 27, 2005 @ 10:39 am

  5. All Eyes on SCOTUS (Blog) for 10 Cs and Grokster

    Today is the big final day of this term for the Supreme Court of the United States (SCOTUS), and with such huge decisions coming down today there’s no better page to refresh in your browser than the SCOTUS Blog.

    Comment by ambivalent imbroglio — June 27, 2005 @ 10:40 am

  6. For All You Internet Pirates Out There (You Know Who You Are)

    Via SCOTUSblog:
    The Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.

    Comment by Pros and Cons — June 27, 2005 @ 10:40 am

  7. So does this mean I have to hand in my VCR?

    Comment by Max Beta — June 27, 2005 @ 10:58 am

  8. hahahahah!

    Ah, so great when a bunch of “really smart” people show just how little they understand! So guess that means that the unsecured internet is to be taken down?

    Comment by a nony mouse — June 27, 2005 @ 11:07 am

  9. Grokster Loses – Unanimously – Inducement Test?

    via SCOTUS BlogThe Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.The decision when it appears. Unani…

    Comment by The Importance of... — June 27, 2005 @ 11:22 am

  10. Breaking news: Grok crocked

    It’s the decision that everybody’s been waiting for: and now it seems that the Supreme Court has ruled against Grokster. Despite the complexity of the case, the crucial question remained simple: Are companies that create filesharing systems liable for …

    Comment by Guardian Unlimited: Onlineblog — June 27, 2005 @ 11:28 am

  11. Grokster overturned, unanimously

    SCOTUSblog: A sweeping victory for music recording companies and movie studios, the ruling set the stage for a major legal assault on rampant file-sharing of copyrighted works by attacking the software designers — a much more promising legal avenue th…

    Comment by aTypical Joe: A gay New Yorker living in the rural south. — June 27, 2005 @ 11:35 am

  12. Breaking news: Grok crocked

    It’s the decision that everybody’s been waiting for: and now it seems that the Supreme Court has ruled against Grokster. Despite the complexity of the case, the crucial question remained simple: Are companies that create filesharing systems liable for …

    Comment by Guardian Unlimited: Onlineblog — June 27, 2005 @ 11:37 am

  13. Grokster Loses – Unanimously – Inducement Test?

    via SCOTUS BlogThe Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.The decision when it appears. Unani…

    Comment by The Importance of... — June 27, 2005 @ 11:42 am

  14. Grokster loses

    Details are thin on the ground at the moment, but it seems that the Grokster case has finished with an unexpected (and unwanted) result.

    Comment by DashSlot — June 27, 2005 @ 11:55 am

  15. Proof that American law is getting dumber by the day.

    What’s next? Are the train companies’ going to bring a lawsuit against car manufactures? After all a car has all manner of illegal uses – speeding being the most popular one. Dear Mr Ford – Last year several hundred thousand of your cars were caught speeding – your fine….

    Given the huge amount of pirated material on iPods – is apple next to be sued?

    What about that copy of a DVD I made?! – We better go after Sony next and put a stop to those pesky DVD burners.

    This judgement is an example of the money driven backward thinking that should be abhorrent to any intelligent person in a progressive world.

    Comment by Doug — June 27, 2005 @ 11:59 am

  16. “Ah, so great when a bunch of “really smart” people show just how little they understand!”

    The same could be said about all the techies who wanted this case to go the other way. That they understand a lot about computers and software and the like but very little about the law or how the Supreme Court works.

    Comment by Fern R — June 27, 2005 @ 12:15 pm

  17. Keep in mind that the producers have to actively promote illegal use. Programs, such as BitTorrent, that don’t promote illegal use and have solid legal uses (downloading Linux ISOs, game patches, etc) are just fine.

    Comment by Merkidemis — June 27, 2005 @ 12:17 pm

  18. yeah, where are the lineups for those about to sue xerox and ricoh for being one “who distributes 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”?!

    Comment by david banner — June 27, 2005 @ 12:18 pm

  19. I agree with the supreme court on this one. If you have a copy of software you don’t own that is copyrighted then you’re downing something illegal. Software made for the sole purpose of spreading illegal software should not be allowed. VCR’s can be used for making copies of free (TV) programs and viewing rented programs. This software has only one purpose and that is to skirt the law.

    Comment by Boomstik — June 27, 2005 @ 12:18 pm

  20. Not sure that Doug’s comment is worth responding to, but… the Supreme Court didn’t say that one conceivable illegal use makes something illegal.

    A more appropriate analogy would be that the government can outlaw private possession of nuclear missiles, even though some law-abiding people might just use them as decorations or coat racks.

    This is hardly “money-driven backward thinking.” Or if it is, it’s not for the reasons you suggest.

    Comment by WB — June 27, 2005 @ 12:21 pm

  21. Hey there, y’all.

    This case could not reasonably have gone the other way.

    That’s speaking as a lawyer, not as a user of free stuff/young person.

    About the using-yer-own DVD-copy thing: the copyright owners don’t want to sue person-by-person. I think that’s clear. It’s a loser for them, and most individuals are either not committing crimes/using their own property, or are such small potatoes that it costs too much to pay the lawyers.

    But if companies were, say, making streaming movies available for free on or before the day they came out… don’t you think the people with the rights would care, a little?

    If you make a copy of your DVD of Braveheart, and keep one in the car (please, in the backseat, not while driving at the wheel!), and one in the bathroom- or even one downstairs, one upstairs, one in your personal laptop at work, whatever – that should be fine. It’s time-shifting. You own it, you want to have it at hand. You should not have to buy it twice (or more) just so you can access your content.

    But when you burn a copy, not just for your buddy, or your girlfriend, or a guy you met on the street, but you start selling them out of a van, you’re competing against someone. Not too bad, you think?

    Well, what if you started making money online by sending file torrents of the whole thing to anyone who paid you a buck?

    Would that still be harmless to the content owner? Yes, I know it’s not the same as watching it in a theater- that’s a GOOD thing. Lord, I hate popcorn prices, people on cell phones, too-cold theaters, ads before the movies, idiot theater owners who turn the bulbs down in the projectors, bad focusing, bad sound, loud children, tall neighbors in front of me…

    Anyway.

    No, you can keep your VCR. Remember? The internet is NOT THE SAME as having a VCR. We’re talking digital _and_ networked.

    Flames are welcome to find me at unusedandunusable.blogspot.com or at the same name at gmail.

    HAND.

    Thanks, scotusblog, for taking the hit of Fark traffic, and for bringing us the news.

    Comment by Eh Nonymous — June 27, 2005 @ 12:30 pm

  22. Blogs on today’s SCOTUS rulings; Xeni on Grokster on NPR, CNN

    A number of blogs are providing coverage and analysis of today’s Supreme Court decisions, which include the closely watched MGM-v-Grokster case. Tech developers lost. The court ruled unanimously in entertainment companies’ favor, saying that makers of …

    Comment by Boing Boing — June 27, 2005 @ 12:32 pm

  23. Grokster Decision

    DECISION No. 04-480, MGM Studios v. Grokster, reversed 9-0, in an opinion by Justice Souter. Justice Ginsburg concurred, joined by the Chief Justice and Justice Kennedy; and Justice Breyer concurred,…

    Comment by Tech Law Advisor — June 27, 2005 @ 12:37 pm

  24. So with the language they used the internet as a whole is now a target. FTP, IRC, P2P, anything that can be used to distribute copyrighted material can be sued.

    this is a sad day indeed.

    Comment by ethos — June 27, 2005 @ 12:38 pm

  25. Time to shut down the internet. The designers of TCP/IP, after all, took “affirmative steps” to keep the architecture of the internet separate from the applications which use it. This affirmative design decision fostered the perfect
    environment for piracy to flourish.

    Either that summary is missing the true logic of the decision, or the SCOTUS has lost all reason.

    To the money-grubbing, artist-cheating monopolists of the RIAA, any technology that enables private and/or (semi-)anonymous sharing or trading of files is imagined to be primarily about copyright infringement (which they misleadingly call piracy) – witness the recent fears about BitTorrent. This creates a burden on the creators of software that cannot be overcome – the use of the product apparently determines the motive behind its creation, in the mind of the Supremes. It’s hard to imagine how that is good law.

    Goodbye Freedom. Goodbye privacy. You may now longer exchange data anonymously with others on the internet. 50 years from now this decision is going to be an embarrassment.

    @Fern R: you are wrong. The smart people who understand both the law and the technology are going to have a hard time explaining how this decision makes sense.

    Comment by MadAhab — June 27, 2005 @ 12:38 pm

  26. News from the US Supreme Court:

    Grokster, StreamCast Lose. From the post on SCOTUSblog: “In a decision announced by Justice David H. Souter, the Court said: ‘We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expres…

    Comment by mikel.org | Michael Boyle's weblog — June 27, 2005 @ 12:41 pm

  27. A note to the dimwits who have been howling, yowling, whining, and screeching: Note the SPECIFIC WORDING of the decision. Grokster, et al, were dinged because they promoted “use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement”. This is NOT what VCR manufacturers do. They sell it to play your home movies or play movies that you rent or purchase. Automobile manufacturers do NOT advertise that automobiles should be used to run people over or smash into businesses for robbbery purposes. Likewise, DVD burners are NOT marketed as a means whereby one illegally republishes material. The principle of “significant legal use” has already been well-established in US law. If it can be shown that significant legal use exists for something, then it cannot be presumed illegal merely because someone might use it illegally, although specific legislation is a different matter. Grokster, et al, were presented primarily and specifically as a means whereby one could ILLEGALLY share copyrighted materials. Thus, by “fostering” infringement, the defendents took their product out of the realm of “significant legal use”.

    Comment by Bryan — June 27, 2005 @ 12:42 pm

  28. “This software has only one purpose and that is to skirt the law”

    This statement is entirely false

    “A more appropriate analogy would be that the government can outlaw private possession of nuclear missiles, even though some law-abiding people might just use them as decorations or coat racks.”

    Forget the government – are we heading down a road where large companies can now outlaw technology that they deem is not in their interests even if it has proven legitimate uses?

    Comment by Doug — June 27, 2005 @ 12:45 pm

  29. Grokster Loses – Unanimously – Inducement Test?

    via SCOTUS BlogThe Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.The decision when it appears. Unani…

    Comment by The Importance of... — June 27, 2005 @ 12:49 pm

  30. Grokster overturned, unanimously

    SCOTUSblog: A sweeping victory for music recording companies and movie studios, the ruling set the stage for a major legal assault on rampant file-sharing of copyrighted works by attacking the software designers — a much more promising legal avenue th…

    Comment by aTypical Joe: A gay New Yorker living in the rural south. — June 27, 2005 @ 12:53 pm

  31. Doug, MadAhab, et al.–See others response (read: the non-techie responses) to your posts. I understand that you guys are frustrated and that you disagree with this decision, but I don’t think you guys have a grasp on what the decision REALLY means, or for that matter, intellectual property law.

    Comment by Fern R — June 27, 2005 @ 12:57 pm

  32. Are we going to start seeing software with warnings that are the equivalent of “For Tobacco Use Only?”

    Comment by Eric J — June 27, 2005 @ 1:10 pm

  33. Rhis would be OK If the studios and film companiees made efforts to close the huge factoties in India and China, and got the backing of the gov before going after the small guys, they have to use common sense or hoards of people will use the internet to but copies, by post, or from a man in a pub! but as usual they go after the soft targets and whine about Apple. Me I will try not to give the bastards one penny untill they get some ethics, I can get a good copy (heaps better than a pre-recorded VHS) for£5 delivered next day, or 3 for£12 I avouded it on principle after the first one but as the other side has none why should I waste mine?

    Comment by chris Edwards — June 27, 2005 @ 1:23 pm

  34. Grokster Loses – Unanimously – Inducement Test?

    via SCOTUS BlogThe Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.The decision when it appears. Unani…

    Comment by The Importance of... — June 27, 2005 @ 1:24 pm

  35. Grokster, Streamcast Lose

    Not a good day for us. SCOTUSblog has more. EFF Wall Street Journal Roundtable…

    Comment by Zmetro.com — June 27, 2005 @ 1:38 pm

  36. Supreme court rules against Grokster in P2P case

    Huge blow to P2p software developers because now they can be held liable for copyright infringement of their users, says the Supreme Court ruling in MGM Studios vs. Grokster cast 04-480:
    the Court said: “We hold that one who distributes a device…

    Comment by Things That ... Make You Go Hmm — June 27, 2005 @ 1:48 pm

  37. Grokster Loses – Unanimously – Inducement Test?

    via SCOTUS BlogThe Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.The decision when it appears. Unani…

    Comment by The Importance of... — June 27, 2005 @ 1:54 pm

  38. All I can say is that China must be loving this!

    Comment by Peter G — June 27, 2005 @ 2:00 pm

  39. I can’t help but wonder if the people so loudly protesting this judgement gave actually READ the opinion? It seems to me that people glance at the Google news alert headlines, and snap into their prepared speeches, without stopping to read through the actual Opinion.

    Virtually all of the complaints registered above are answered (or at least addressed) in today’s opinion and concurrence. Souter went out of his way, it seems, to emphasize that there are valid uses for P2P, and that the technology itself is inherently neutral. He provided a veritable manual for how to make legal file sharing software. Read the dang opinion!

    Comment by Simon — June 27, 2005 @ 2:10 pm

  40. Bryan has it exactly right – you really have to read the opinion in order to understand exactly what it is that SCOTUS is deciding. It’s not a reversal of Sony and you don’t have to turn in your VCR/xerox/Tivo (yet). And while I haven’t made it through the entire thing either, it’s clear (from the opinion) that Grokster/StreamCast actively sought ex-Napster users as potential new clients whom they could advertise to. In order to attract these clients, they promoted their alternative as being “Napster-like” and implying that all sorts of copyrighted material would be available.

    p2p still is capable of substantial non-infringing uses, but SCOTUS found fault in Grokster’s willingness to actively promote that type of illegal file-sharing.

    Comment by antonymous — June 27, 2005 @ 2:12 pm

  41. After reading the opinion, I’m guessing what would happen to those sites that are nowadays publishing and maintaining eD2k or bittorrent links. Are they also responsible for copyright infringment?.

    Comment by Javier Prenafeta — June 27, 2005 @ 2:40 pm

  42. Urg. Grokster Loses.

    SCOTUSblog: Grokster, StreamCast Lose. This is not good….

    Comment by Link-Fu — June 27, 2005 @ 2:42 pm

  43. Grokster Loses – Unanimously – Inducement Test?

    via SCOTUS BlogThe Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.The decision when it appears. Unani…

    Comment by The Importance of... — June 27, 2005 @ 2:48 pm

  44. Grokster Ruling Commentary

    In this post, I’ll summarize some of the various blog reactions I read. You should start with my own, of…

    Comment by Technology & Marketing Law Blog — June 27, 2005 @ 2:51 pm

  45. Strike 3 you’re out

    The Supreme Court blows another one: developers of file sharing software violate federal copyright law. To me this is the equivalent of saying that gun manufacturers violate murder statutes by making guns. And I wouldn’t be surprised if this becomes…

    Comment by Lone Dissenter — June 27, 2005 @ 2:51 pm

  46. “Are we going to start seeing software with warnings that are the equivalent of “For Tobacco Use Only?”"

    Yeah, I think so. Ultimately, I don’t think this is at all about what the software does. It’s about what the software is marketed to do. If you market the software as a way of violating copyrights, yeah, you’re encouraging copyright violation. As long as other P2P developers don’t market their software as a way to break the law, they’re more or less in the clear.

    FTP and IRC aren’t in trouble until someone advertises their client as a great way to download music without paying for it. And even then, the protocols aren’t in danger, just the individual clients/developers thereof.

    Comment by Todd — June 27, 2005 @ 2:58 pm

  47. Javier – as I read the opinion, I would say that an activity which is substantially or exclusively oriented towards the infringement of copyright would render one open to liability. So if you had a website called http://www.illegal-movies-bit-torrent-source.com or similar, which did exactly what it said on the tine, you could be held liable. By contrast, if you had a website where Bit Torrent users could reposit their files, and you took substantial and reasonable measures and actions to prevent (or at least curtail) the presence on the site of illegal material, you’d probably be okay under a notional “Grokster Rule”.

    My question, though, is this: if Grokster says that a company can be held liable for damages if a product is marketed for illegal purposes, does the posited Grokster Rule therefore have implications for other products, which are primarily marketed for the undertaking of breaking the law? I’m thinking in particular of police radar scanners, but I’m sure that there are myriad others.

    Comment by Simon — June 27, 2005 @ 3:03 pm

  48. The voice of reason (one time only)

    I have to agree with the US Supreme Court and “SCOTUSBlog”:http://www.scotusblog.com/movabletype/archives/2005/06/grokster_stream.html on the Grokster case. My reading is that the…

    Comment by Thought Mesh — June 27, 2005 @ 3:04 pm

  49. Grokster Loses – Unanimously – Inducement Test?

    via SCOTUS BlogThe Supreme Court ruled unanimously that developers of software violate federal copyright law when they provide computer users with the means to share music and movie files downloaded from the internet.The decision when it appears. Unani…

    Comment by The Importance of... — June 27, 2005 @ 3:06 pm

  50. Simon–A potential example of such a product/website is http://www.phantomplate.com. The company’s sole purpose is to sell products to people who wish to avoid having their license plate photographed by a traffic camera when the driver runs a red light. The Washington Times wrote an article about these sorts of products: http://www.washtimes.com/national/20030703-120901-3612r.htm

    It would be very interesting, as you pointed out, to see if products like “PhotoBlocker” and the companies who prodcue and sell it can now be sued under Grokster.

    Comment by Fern R — June 27, 2005 @ 3:22 pm

  51. Wow! Next thing you know, they’ll say it’s OK to just take your property away and give it to somebody else… wait, what? They already…? Shit.

    Hah! I kid!

    Anyway, sounds like people need to go a bit further in depth to explain that Grokkster is being had on grounds not of actually *permitting* infringment (the idea that a “dumb” system like IRC, P2P, or email “permits” anything is a dangerous one indeed — they are inherently “permissive” and can only “deny” actively), but rather on grounds of *encouraging* infringment through their advertising/marketing methods. At least EDonkey/Overnet has the good sense to promote really-free downloads like demos and samples, and turning a blind eye to infringement.

    Comment by James — June 27, 2005 @ 3:33 pm

  52. Lets be honest – the whole things a farce. The case could be lampooned on your favourite comedy sketch show without bothering to change the script.

    Everyone expected a big decision and we got nothing. On one hand the judges appease their corporate sponsors with a 9-0 landslide. Then on the other they try to cover up the lunacy of the decision with a few vague get out clauses. Permitting infringement and the way the product is advertised? Neither of which will hold up in the real world. Just allows more lawsuits to take advantage of a bigger grey area.

    What we needed from this case is a severe reprimand for the way media companies are conducting business and failing their customers.

    We needed a review of the copyright laws which are nonsense and just don’t work in a world where people have a broadband connection.

    Comment by Doug — June 27, 2005 @ 5:12 pm

  53. “My question, though, is this: if Grokster says that a company can be held liable for damages if a product is marketed for illegal purposes, does the posited Grokster Rule therefore have implications for other products, which are primarily marketed for the undertaking of breaking the law? I’m thinking in particular of police radar scanners, but I’m sure that there are myriad others.”

    These things are generally not federally regulated. There is no federal ban or regulation on radar detectors. There is plenty of federal legislation on copyright, however.

    Comment by Brian Carnell — June 27, 2005 @ 7:32 pm

  54. To Bryan:

    VCR manufacturers do actively promote the use of their technology for the unauthorized recording of copyrighted material. What do you think broadcast TV is? If VCRs were truly sold only with the purpose of playing home movies or rentals, there wouldn’t be a “record” button on any of them. The problem with this decision is that the wording is too vague as it relates to “the promotion of illegally distributing copyrighted works”.

    What exactly does this mean? Instead of clarifying intellectual property law (which we desperately need in this counrty), this decision will only muddy the waters further. This is proof positive that the legislation surrounding intellectual property laws is outdated and needs to be completely overhauled before the rights of content producers completely overshadow the right of society to a shared cultural heritage through the free exchange of ideas.

    Comment by MEP — June 27, 2005 @ 9:49 pm

  55. Doug–Really? People interested in Grokster because they are techies (as opposed to Supreme Court junkies) thought that Grokster was going to win? I think most people looking at the case from a legal perspective predicted a loss for Grokster, a big loss. I doubt anyone in the legal community was shocked, although I haven’t spent much time checking the legal blogs to read their comments on the case.

    Comment by Fern R — June 27, 2005 @ 10:29 pm

  56. MEP–Recording a TV show with a VCR is not illegal. So if a VCR manufacturer were to advertise that his VCR can be programed to record all of your favorite shows, the VCR manufacturer wasn’t doing anything illegal before Grokster and he isn’t doing something illegal after Grokster. If what you have suggested were true, TiVOs would be illegal because there is no other purpose for TiVOs other than to record television.

    Comment by Fern R — June 27, 2005 @ 10:38 pm

  57. Are we all here to be practical in our reactions? Does it matter that the system we all live under is contradictory in ways that have specific benefits?

    If so, I suggest we all roll with the punches. Why not? It is pretty clear that something has to change… isnt it?

    I mean, we live in an organic world that grows weed(s) out of control… where wild animals and insects prey as they see fit… and where humanity is fully vested in developing a system of absolute coordination, perfected.

    We are the creators of the Creation… created in the Creator’s own image…right? And majority rule, when it is running at like the 90% – 10% split… well its damn near invincible now isnt it?

    Terrorism, a war on drugs, eminent domain, public education, and now this Grokster thingy… sure, it means many things to many people with many different perspectives. You know what it means to you.

    Be careful.

    Take care.

    Think….

    I think now is a good time to be greedy. Now is the time to use the law to benefit ourselves personally. I mean, the Supreme Court told me the other day to use my managerial influence and well, sheer brilliance… to dominate the world. So in the name of economic development, I think I will.

    And now we are protecting copyright 1st… and making life more convenient and empowering only after the economic structure of intellectual property is secured… in this country… in some ways… to the best of our ability… we hope….

    Again… as a creator… I am important. To my peers I say this: I will now commence my agenda, put in place this day at this hour, to make a buck off of you in virtually any manner I so choose, as long as I am doing it in a manner consistent with the tools I am allowed to use in the way that I am allowed to use them.

    I am the next Bill Gates. My power is crazy big.

    So I have an idea…

    I think that kids are a great market. I mean they are naive, very impressionable, and they have big fat wallets attached to their hips often times. Or at least a rope attached to the parents wallets.

    So I am thinking that someone who knows how to build a peer-to-peer file trading network should do so with me. I am going to take it to the schools wrapped inside of an “Entrepreneurship Education” program that is being funded in part by the US Government through the Small Business Administration or some other like minded group of government managers. I mean, they are crazy hungry to churn out more entrepreneurs so that more jobs can be created. Well, we are going to turn every kid in the school into an entrepreneur, an owner of their own business, a business that organizes the marketplace as a network, a network that distributes ownership of its primary asset….

    Your Identity.

    It is no longer enough to be merely a citizen of this country. You must be an owner of America, not just in America. Universally Distributed Private Ownership of the socio-economic marketplace that is America is the goal. One identity at a time….

    Kinda gives a whole new meaning to “An Army of One”… doesnt it?

    Eminent Domain took something away.

    MGM vs Grokster took something away.

    From you… joe-citizen.

    An individual life has less power than a corporation with one owner, one member, one employee. Both are alive in the eyes of the law and the IRS

    Its a simple formula really. Either you get it or you dont. The thing is, no one person can build this revolution.

    To be cliche… This revolution will be televised… network wide… copyright in tact and disregarded.

    Toodles
    NZN

    Comment by NZN — June 27, 2005 @ 10:48 pm

  58. The sad irony here is that the technological advances in the digital distribution of media, be it audio or video, which germinated and flourished throughout p2p and filesharing communities, are now going to be effectively hijacked for a yet another new era of monopolistic distribution. Truly sad.

    Comment by navigator — June 28, 2005 @ 12:20 am

  59. SCOTUS II

    So, the Supreme Court ruled that programmers who write a program which facilitates copyright law violation i.e. Grokster et. al. can be held responcible for what users do with their software.

    “We hold that one who distributes a device with the obje…

    Comment by Fresh Politics — June 28, 2005 @ 10:55 am

  60. P2P Loses

    SCOTUSblog is reporting that the decision in MGM v. Grokster has gone in MGM’s favour.
    The judge announced that
    We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression …

    Comment by Tom Scrace — June 28, 2005 @ 11:08 am

  61. The Grokster decision isn’t the end of the world. It isn’t even the end of the case. It certainly isn’t the end of the war.

    The Supreme Court decided unanimously that the Appellate Court had misinterpreted the rule in the Betamax case. It did not overturn Betamax.

    For those of you who haven’t been bothering to keep score, the Betamax case is the one the movie studios brought against Sony for selling VCRs. You may remember that Jack Valenti compared VCRs to Jack The Ripper, and swore up and down that they would eviscerate the industry. In that case, the Supreme Court ruled that even if some
    technology could be used to infringe on copyrights, it could not be guilty of contributing to that infringement if it was capable of “substantial non-infringing uses.” The Court found that taping Mr. Rogers and “time shifting” were substantial non-infringing uses
    and saved the movie business from self-immolation. In 1984, when the Betamax case was decided, box office revenues were responsible for 80% of movie industry income. Last year, the figure was 20%. A large part of the historic shift was due to those demon VCRs.

    Betamax was a godsend to the tech sector. All those code writers and black box builders had a safe harbor for their inventions; as long as there was a chance what they were doing had a “substantial non-infringing use,” if it could also be used to duplicate copyrighted works, or distribute them, that didn’t matter. They couldn’t be sued out of existence. As a result, we got CD burners, DVD burners, iPods, email, Instant Messengers, and Napster.

    But the guys at Napster screwed up. They used central servers where you could go to get those free (and unauthorized) downloads of copyrighted songs. Because Napster owned those servers, they controlled the contents, and the courts found them guilty of direct infringement by distributing unauthorized copies of copyrighted works.

    The next generation got smarter. Grokster and Morpheus don’t require central servers. Their software connects the computer of someone who wants to copy a file with the computer of someone who has the file. No real middleman; the Grokster and Morpheus people never possess the file, so there is no direct infringement.

    So, the RIAA was forced to go after these guys on the grounds that they were infringing “contributorially” (inducing others to infringe directly) or infringing “vicariously” (profiting from someone else’s infringement while declining to exercize a right to stop or limit it). Together, these are known as secondary infringement.

    The trial and appellate courts said the RIAA ran squarely up against the Betamax doctrine because the p2p networks were capable of substantial non-infringing use. Evidence introduced by the RIAA appeared to support the argument that at least 90% of the files being traded were of copyrighted material. (Ironically, in the Betamax case, the court found that Sony’s claim that 9% of shows being taped were legal was enough to be a “substantial non-infringing use.”)

    Here’s where the defendants got sunk. The Court said today that the fact that there was a substantial non-infringing use would not always be enough to protect a defendant. The Betamax rule would protect an inventor from a slam dunk lawsuit based strictly on the fact that his or her device could be used to infringe on copyright, but it wasn’t protection against every type of infringement claim, including what they called “fault based liability.”

    Back in Betamax, the court considered whether a defendant could be guilty of secondary infringement simply by distributing a commercial product like a VCR or p2p software. The court actually said “YES” and drew on an established principle of patent law, where, in certain circumstances it can be presumed that the distributor intended that the product being distributed would be used to infringe on someone else’s patent. Think cable descramblers here. The intent to infringe is obvious because the descrambler doesn’t have a legal use other than beating the legal scrambler patent.

    The court went on to say that the answer could still be “YES” in cases where there was more “acute fault” than the mere understanding that the device could be misused.

    And the court found that the record below indicated there was more than enough fault by both Grokster and Morpheus, who had purposely positioned themselves to take Napster’s place and had made no real effort to disguise the fact that they were in the business of permitting the transfer of copyrighted material. There is a lot of reference to internal documents from both companies that prove the point, and both defendants had help desks where people would say “How do I download Britney Spears?” and they would give detailed instructions. That looked like contributory infringement to Justice
    Souter. And, as the record showed, they both sold streaming advertising while you were on their sites, and they were profiting from it, so that was strong evidence of vicarious infringement as well.

    So the case is consistent with Betamax in this very important regard.

    The clearest point the opinion makes to the next generation of American p2p designers is to not even think about the elephant in the living room. Build your file trading program and make sure every time you mention it, you make sure that the only files you talk about trading are Shakespeare, the Bible and Janis Ian.

    The new risk the decision presents is not only that these designers have lost something they never really had, but that there is another door open at the courthouse now where they can be dragged in and bankrupted. That could chill investment in new development.

    As far as foreign p2p designers are concerned, today was just another day at the office. The case doesn’t reach them.

    Oh, and, after she crowed “we won!,” Hilary Rosen reminded everyone that winning in court was not the same as winning in the real world, and she counseled everyone to work together to find a way to make p2p pay for everyone. Someone should point out to the newly magnanimous observer that this case was started on her watch at the RIAA, and she had a great chance to make that point when she ran the place. I am not impressed by her voice of reason now that she no longer has her own finger on the trigger. People are commenting on how accurate and rational her advice is. I have to remind them that “Our Lady of The Bloody Hands” is still an industry hack, living on a pension funded by diverted royalties.

    Comment by Ron — June 28, 2005 @ 12:50 pm

  62. I cannot believe the number of people I see here that constantly present this issue as a “little people versus corporate villians” thing. To me it sounds more like a “thieves versus creators and investors” issue.

    Companies invest money to create various things, where they hope to recover such investments through consumers’ watching/buying of such things. Should they have a right to revenue recovery? Should they have a right to control who they show their creations to? Can anyone tell me why they should not, and why a company that has invested US$200 million to produce a movie just HAS to share that with the rest of the world free of charge? If you are running the company, would you make such an investment if you are expected to see zero return? If all of the professionals stops making movies and the market is filled with low budget garage movies made by some zealous students with nothing better to do, would you as a consumer feel that your life is much better because “the world is finally free”?

    We don’t live in a communist system where everyone is supposed to share everything and the sharing is its own reward. The communist system has been proven to be a failure. Don’t be naive.

    Don’t act like some sad sad people that blame their personal faults and failures on “DA SYSTEM” all the time. That just shows how much of a basket case you are.

    Comment by RCL — June 28, 2005 @ 11:58 pm

  63. In reply to Eh Nonymous’s quote: “If you make a copy of your DVD of Braveheart, and keep one in the car (please, in the backseat, not while driving at the wheel!), and one in the bathroom- or even one downstairs, one upstairs, one in your personal laptop at work, whatever – that should be fine. It’s time-shifting. You own it, you want to have it at hand. You should not have to buy it twice (or more) just so you can access your content.”

    I have to strongly disagree. Time-shifting back in the day was all well and good, but it’s better to use caution when advocating that view today. The Judges in the Sony case allowed time-shifting mainly because at that time there was little effect of the use upon the potential market for the copyrighted work.

    Back in the 80’s there were no DVD/VHS of freely broadcast television shows. Not so today. For example, let’s look at the DVD medium and the UMD medium (it’s the little discs that the new Sony PSP uses). Take Hellboy for example. It’s sold on DVD media, and also sold on UMD media. Thus, if a consumer/licensee of the DVD media were to reproduce the content viewable on the PSP’s memory stick, the consumer would then have no need to buy the UMD version. And if that’s the case, Sony has just lost a potential sale for it’s UMD version of the movie.

    Comment by Anon-a-Mouse — June 29, 2005 @ 5:52 pm

  64. Grokster Reversed in Unanimous Decision

    Some bad news from SCOTUS(Blog).

    The Supreme Court ruled unanimously that developers of software…

    Comment by Loosely Coupled // Tim Marman's Weblog — July 2, 2005 @ 10:15 am

  65. Grokster lost

    Well, as many of you already know Grokster lost in MGM v. Grokster, but not as badly as one might have expected. Instead of saying that a technology is illegal if it allows for infringing, the court ruled that it is only illegal if a company actively …

    Comment by Blog of a crazy man — July 2, 2005 @ 6:44 pm

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