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Online Music Case Outcome Rests on VCR Technology
03/28/2005 4:59 PM, Reuters
Andy Sullivan
When Internet file-sharing services
and the entertainment industry square off in the U.S. Supreme
Court on Tuesday, the outcome will likely rest on a nearly
obsolete technology -- the videocassette recorder.
Backers of "peer to peer" networks like Grokster will argue
that the software makers deserve the same protections as VCR
manufacturers, because both can be used for good or ill.
Record labels and movie studios will argue that Grokster
should be held responsible when its millions of users illegally
copy movies and music directly from each others' computers.
Both sides will agree one one thing -- the court could harm
their ability to produce innovative new products if it doesn't
rule in their favor.
"If nothing is changed and these services continue to
operate, it will have an impact on the creative process. For
the movie industry, it will mean less risk will be taken in
terms of the creation of new material," said Dan Glickman,
president of the Motion Picture Association of America.
"The way new technology is created and funded is it's a
high-risk affair. It's not going to get funded if there's a
sword of litigation hanging over it," said Gary Shapiro,
president of the Consumer Electronics Association, which
supports Grokster.
The Supreme Court in 1984 ruled that Sony Corp (SNE.N). couldn't be
held responsible if users of its Betamax VCR copied television
shows without permission, because it also could be used for
legitimate purposes such as taping a show to watch later.
Lower courts have said that ruling applies to Grokster as
well.
The Betamax ruling has allowed consumer-electronics makers
to develop products without getting permission from Hollywood
first -- a key to the industry's success that could be upset if
the court rules against Grokster, backers say.
"Every technology from the CD burner to the personal
computer to the iPod has emerged in part because of the clarity
of the (Betamax) rule," said Fred von Lohmann, a senior
attorney with the Electronic Frontier Foundation who is
representing Morpheus.
Grokster backers point out that the entertainment industry
has a long history of initially opposing new technology, from
the player piano to the VCR, that has ultimately benefited it
in the long run.
But that doesn't change the fact that Grokster makes its
money almost entirely by encouraging people to illegally copy
music and movies, the entertainment industry argues.
Using that logic, a single instance of "legitimate" use can
justify millions of illegal transactions, they say.
"Nobody would suggest that the iPod is a business based on
infringement," said Cary Sherman, president of the Recording
Industry Association of America. "Grokster, on the other hand,
was conceived for the very purpose of encouraging and profiting
from infringement."
Though the vast majority of traffic over peer-to-peer
networks involves copyrighted material, legitimate uses have
begun to emerge in recent years.
Independent artists like Steve Winwood have released their
music over peer-to-peer networks, while scientists and
government bureaucrats have used peer-to-peer technology to
distribute information cheaply without central server
computers.
Record labels have begun to licensing their music to a new
breed of peer-to-peer networks like Mashboxx that will let
copyright owners exert some control over their material.
The court will also hear arguments about whether cable
companies should have to allow rival Internet service providers
to use their high-speed pipeline.
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