Issue/News: Grokster pays up and shuts down

Just when things were getting a bit tepid in the electronic legal waters Grokster settles their privacy dispute, the result of a multi-year long battle with MGM which culminated at one point in the Supreme Court Case of MGM v. Grokster. Both The Wall Street Journal's article about the settlement, as well as The New York Time's take describe it as a blow to copyright infringement on the internet.

There is a wealth of analysis on the Grokster case... its pretty ridiculous. For a comprehensive look at the case and some associated articles, check out EFF's Grokster site. Much of it is unsurprisingly pessimistic about the Grokster decision (analysis that seems to have been reinforced with Grokster's closing). For example analysis from BagandBaggage argues that this case is a harbinger of speech chilling, akin to Batzel v. Smith, specifically the section that reads (their emphasis):

Although Stratton was a defamation case, Congress was concerned with the impact such a holding would have on the control of material inappropriate for minors. If efforts to review and omit third-party defamatory, obscene or inappropriate material make a computer service provider or user liable for posted speech, then website operators and Internet service providers are likely to abandon efforts to eliminate such material from their site.

I disagree with their analysis, because the Grokster case is different in a couple of significant ways. First, the assumption made in Batzel is that with the status quo, website operators and Internet service providers self-regulate to some extent. In Grokster, the court bases its analysis partly on the fact that Grokster was created to attract ex-Napster users that used the p2p program for copyright infringement purposes- thereby negating this assumption. Second, the argument is talking about a regulation that goes beyond Grokster. It makes the argument that sites and services that filter material ought not be responsible for such material. Grokster only makes the claim that p2p services have to make an attempt to filter in the first place, with nothing about responsibility after that attempt is made (in other words, the burden is on Grokster showing that the service is set up to be used primarily or at least significantly for SNUIs). Justice Souter wrote in the majority opinion,

Respondents' efforts to supply services to former Napster users indicate a principal, if not exclusive, intent to bring about infringement. Second, neither respondent attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software. While the Ninth Circuit treated that failure as irrelevant because respondents lacked an independent duty to monitor their users' activity, this evidence underscores their intentional facilitation of their users' infringement. Third, respondents make money by selling advertising space, then by directing ads to the screens of computers employing their software.

So what's going to happen now in the wake of the Grokster settlement? After the decision Judge Richard Posner wrote an opinion about the Grokster case, which concludes that the 'middle way' might be to have file sharing systems be required to take reasonable (cost possible) steps to filter illegal material. This, to me, makes sense, but its a shame that the architecture is shifting towards one of control. However, its too soon to jump to that sort of broad conclusion... taking a look at SCOTUSblog's discussion on the Grokster material, this settlement/decision only establishes a principle that cannot be readily applied to such technologies as BitTorrent, which has a much clearer promotion of non-infringing transfers. It also has some posts by one of the lawyers of the case, Fred Von Lohmann, who points out some possible analogous technologies that will be effected. Furthermore, Pamela Samuelson of the Berkeley Center for Law and Technology argues concisely and effectively that although the MGM v. Grokster decision may look far-reaching, in actuality the decision is a win for the technology community since the Supreme Court decided not to revisit the Sony Safe Harbor Act (which protects technologies which can be used for illicit purposes, but that have clearly defined legitimate uses). [Update- And although Lessig agrees with Samuelson about the refusal to re-postulate the safe harbor stanndard, he argues in an interview with business week that the case will chill invention by placing an undue economic and legal burden on corporations.]

So big news- but we'll have to wait and see how far and powerful the Grokster settlement's ripples are- although it is somewhat of a indication of the direction of a much more powerful wave- how far software development will be beholden to legal concerns. With Grokster gone, it looks like BitTorrent might be next text (the recent arrest of a Hong Kong man using BitTorrent for copyright violations suggests that for the time being, it is the user and not the technology in this case that bears the burden of the law).