January 17, 2005

Technology overrules the law

By: David Freddoso

Until now, technology and entertainment have enjoyed a symbiotic development in the modern age. Photography, motion pictures, television, audio tapes and CDs, DVDs, and Internet streaming have given content creators better and better platforms from which to wow the rest of us–while making tons of money. Now they must wonder if they have created a monster.

The irony is that technology is turning on its master, promising to devour the entertainment industry’s profitability. Its facility for copyright infringement is finally reaching the point at which it truly threatens the content we currently enjoy.

Even worse, it appears that no one can stop it from happening. Mass theft of music and movies will remain illegal, but the law preventing it will be unenforceable.

This story goes back to the 2001 court case in which Napster–an online file-sharing network–was effectively disbanded. Copyright owners successfully sued to stop Napster from standing idly by while its users were stealing their product. The only problem is that the ruling was not as much a victory for property rights as a technical decision that depends heavily on the process and the system by which files are illegally shared. Napster was shut down because the program was highly centralized and operated with central knowledge of, and responsibility for, what users were doing.

But what if someone set up a file-swapping network in such a way that no one can be found liable because no one knows what is being copied and stolen? The software’s creator could wash his hands of any of the users’ wrongdoing. He would be the teflon don of copyright infringement.

That’s exactly what has happened. In the wake of Napster’s downfall, a handful of unscrupulous Internet companies mastered the “peer-to-peer” network software, which allows users to trade files directly between one another, without the knowledge of any centrally responsible individual.

The legal reasoning is impeccable, upheld correctly in federal court twice already. Grokster and other such networks operate without any central knowledge of user activities, since their software causes users to connect with one another directly.

And as little as I can sympathize with such obvious cooperation in property theft, it won’t be easy to ban Grokster and its kin without banning all kinds of other activities that are protected by the same property rights. That’s what the Ninth Circuit Court found in August when it ruled against the copyright owners.
A major portion of the court’s ruling is its finding that the creators of the software are not guilty of “contributory copyright infringement,” the three criteria for which are: (1) direct infringement by a primary infringer, (2) knowledge of the infringement, and (3) material contribution to the infringement.

In this case, neither (2) nor (3) are really present. Because Grokster and the other disputed software companies can boast other legitimate uses for their product, the court gives them the benefit of the doubt and requires the plaintiffs–the copyright owners–to show knowledge of specific infringements. And when it comes to material contribution, the argument is again weak. Unlike the defendants in Napster, the defendants in Grokster are not giving them a place to store files or an index of what’s available. The defendants lack the ability even to suspend users of their software. They cannot be pinned to any illegal activity.

The merits of the case aside, it will be difficult to rule because of the effect the case will have. Rule one way, and the market for filmmaking and music recording evaporates, taking our cultural productions with them.

Rule the other way, and suddenly we’re prosecuting people for writing software that has the capability of perfectly legitimate use. How can a property rights absolutist make the argument that anyone should be prosecuted for writing or distributing their own software?

The Supreme Court granted certiorari for the Grokster case in early December and is expected to return a decision this summer. It is always hazardous to guess how their cases come out, but it would be very difficult to reverse the Ninth Circuit ruling that (in a big change for the Ninth Circuit) is well reasoned and succinct.

We may be at the point at which no one can save entertainment as we know it. And who knows–it may not be such a bad thing.

Perhaps the new model of entertainer comes from Matt and Mike Chapman, creators of Homestarrunner.com. They take a much lower income–making their money on merchandising–but a much higher level of independence.

David Freddoso, a native of Indiana, is a political reporter for Evans and Novak Inside Report.

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