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Monday, June 20, 2005

Gearing Up For Grokster, Part II

My firm's external PR consultants* are great about staying on top of developments in both the law and in involved communications. One of these folks had some fundamental and good questions for me about MGM v. Grokster. Here they are, along with my answers.

If the court rules in favor of MGM, how will this impact the entertainment industry and the file sharing community?

If the Petitioners win here, the MPAA and RIAA will get a shot in the arm akin to the decisions in Napster, and businesses built around P2P networks will have to determine whether there are technological and economic alternatives that let them to go forward without running afoul of the Supreme Court's decision. Other technologies will be impacted as well; there was much discussion about the iPod, for example, at oral argument. This is because a win for the Petitioners is likely to involve an interpretation or restatement of the Sony rule in a way that specifies one cannot avoid secondary liability for the copyright infringement of others simply by demonstrating that a technology is capable of substantial noninfringing use. Regardless of what happens in this case (or legislatively), the P2P genie is out of the bottle. And don't count on these defendants necessarily "rolling over" if the Ninth Circuit's decision is reversed. (For example, Mark Cuban helped make sure they had experienced representation before the Supreme Court, and has said he will probably continue to assist.)

If the court rules in favor of Grokster, how will this impact the entertainment industry and the file sharing community?

Such an outcome will make it more difficult to impose secondary, indirect liability against those who make technologies that are capable of being used by others for infringing activities. It will not rule out that kind of liability altogether, and it will not eliminate all the theories of recovery in this case. Certain claims being asserted were not part of the summary judgment proceedings currently under review, and the matter may proceed to trial on those claims. A victory for the respondents is likely to result in an even more concerted effort on the part of the entertainment industry to seek legislative relief from Congress.

How might it look If the court takes a middle ground position?

It's a little difficult to imagine what a middle ground outcome might entail, but the Supreme Court could, for example, decide the Ninth Circuit's reading of Sony was correct, but some aspect of the record here—perhaps uncertainty about the existence and volume of noninfringing use—might preclude summary judgment and require a trial on those issues instead.

*newsPRos, Jamie Moss, (201) 493-1027

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