Technology Isnt the Only Loser in Grokster Ruling

Opinion: The Supreme Court's decision could stifle peer-to-peer file sharing-and innovation in general.

The U.S. Supreme Courts ruling this week to vacate lower court decisions on MGM vs. Grokster is broadly seen as a victory for movie and music copyright holders over file-sharing software publishers.

The decision has little impact on data operations at companies today, and if the narrowly drawn opinion, which never strays from a strict copyright infringement footing, remains constrained, we may never hear of MGM vs. Grokster again. A stern admonition to never, ever, ever use this software to infringe copyright might set things right.

I doubt things will be settled so neatly.

More likely, MGM vs. Grokster will incite the movie and music industry to seek a wider scope for copyrights. And if that happens, its easy to see how the ruling-which doesnt set a clear boundary between the infringing software and the hardware that software runs on-could have a chilling effect on the development of peer-to-peer file-sharing software.

In other words, if Very Large Corporation of Americas file servers get infected with a virus that causes the servers to assist in copyright infringement, what keeps the copyright holders known in the ruling as "MGM" from shutting down the victimized servers?

In particular, if officials at Very Large know that the servers are serving up illegal content, but the servers must be kept connected to the Internet to support Very Larges legitimate business, who prevails?

/zimages/1/28571.gifRead more here about the Supreme Court ruling on the MGM vs. Grokster case.

Owen Seitel, a partner at the San Francisco intellectual property law firm of Idell, Berman Seitel & Rutchik LLP, put it this way in an interview with eWEEK Labs: "The underpinnings of the [court] decision support the idea that if you are a movie or music copyright holder with a lot of money, and you dont like the technology you see being developed by a small company, you are allowed to go on a fishing expedition whose stated goal is to determine if the software makers intend to promote copyright infringement."

The likely outcome of a burdensome, preemptive investigation of this kind is that the small technology innovator will just go out of business.

The MGM vs. Grokster Supreme Court opinion, available here as a PDF, harkens back to the landmark 1984 Sony Corp. of America vs. Universal Studios Inc. ruling. The Sony decision legalized the sale of videotape recorders, even though the recorders could be used to make unauthorized duplicates of copyrighted material.

It is widely held that the Sony decision created an entire movie rental industry that significantly expanded the reach and profits of entertainment distributors.

/zimages/1/28571.gifClick here to read an analysis of how the Grokster decision relates to the "fair use" ruling in the Sony VCR case.

Potentially, MGM vs. Grokster could erode the Sony decision, but for the time being, the IT community will have to wait to see how this unfolds. Ill venture a couple of guesses as to what the ruling will mean without significant intervention from software makers.

First, innovation and new art in peer-to-peer networks will be seriously curtailed in the United States. I can see technology advancements in storage, data sharing and data distribution being retarded.

If MGM vs. Grokster sounds like a strong suggestion to put three or four sets of brakes and a 500-pound lead weight on a high-performance sports car so that people can safely drive 40 m.p.h. on the information superhighway, thats probably the right image.

Technology isnt the only loser in the MGM vs. Grokster ruling. If the open-source model has taught the IT community anything, its that theres more than one way to license-and profit from-digital products. Propped up in the MGM vs. Grokster decision is a way of thinking about copyright that is quickly being outstripped by more flexible and open licensing techniques.

In short, the Supreme Courts MGM vs. Grokster ruling has a good chance of going down in the history books as being as bad for technology and creativity as the 1984 Sony ruling was good.

Labs Technical Director Cameron Sturdevant can be reached at

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