Implications of the Supreme Court decision in the Grokster case

The Supreme Court decision in MGM v. Grokster to send the case back to the District Court was a directive to accept the concept of “inducement” and to hold the defendant responsible for copyright infringement.  As a defense, companies accused of “inducement” in the future will be required to show that their product is capable of “commercially significant non-infringing uses”.

Until a “commercially significant” standard is established, the law shall favor those with the largest legal war-chest who will be able to rain lawyers on the innovative start-ups like the Biblical plagues of Egypt, as currently evidenced by the RIAA’s renewed attacks on all the P2P networks.  Just recently E-Donkey admitted that it could not afford to fight the legal battle with the RIAA and would be closing down it’s P2P service.

These days P2P is synonymous with illegal filesharing. However, it is actually a network architecture that has proven to have commercially significant non-infringing uses. For example, Skype uses P2P software to facilitate Internet Telephony. It has been wildly successful and was recently sold to eBay in a (presumably) “commercially significant” transaction valued at $2.6 billion. The founders of Skype are the very same individuals who created – and later broke their connection with – the KaZaa software that ultimately became a popular P2P vehicle for trading copyrighted files. 

Thus, it is important to recognize that the first applications of a new technology may not ultimately become the dominant ones. To strangle in the cradle a newborn technology that may eventually have considerable legitimate applications merely because the first users have been “bad guys” is contrary to the public interest.

Paraphrased from Inside Digital Media – to listen to an interview with two respected copyright lawyers on this topic, visit Insidedigitalmedia.com and click on the October 19th Interview.  Good stuff.

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