by publius
Mark Cuban’s prophecies came true last week as Viacom sued YouTube (Google) for a cool billion for copyright infringement. In response, some smart people like Lessig and Harold Feld (of Public Knowledge) are blaming the Viacom suit in part on the Supreme Court’s Grokster decision. I generally agree with that argument, but for somewhat different reasons. As I explained when Grokster came down, the case is a classic example of what happens when legal decisions become divorced from real world considerations.
First, some background. Prior to Grokster, the seminal Supreme Court case was Sony v. Universal City Studios (1984), which addressed Sony’s potential copyright liability for its newfangled VCR. Like Grokster, Sony involved the issue of secondary liability. Because the “primary” infringers were VCR users taping Miami Vice and Knots Landing, the issue was whether Sony could be “secondarily” liable for distributing the technology ultimately used for infringement. The Court said no, reasoning that the VCR was “capable of commercially significant noninfringing uses.” In other words, you could use it for good reasons too. Thanks to this decision, we have the video rental market.
Fast forward to 2005. As any sentient being would concede, Grokster was facilitating and promoting massive copyright infringement. The problem, though, was what to do about it (i.e, the concern was the remedy not the right). The challenge federal courts faced was to find a way to extend liability to Grokster without extending it to, say, Microsoft’s operating system (or Intel’s microprocessor). After all, many types of technologies – Grokster, Windows, a Dell notebook, Google’s search engine – can be used for both “infringing” and “noninfringing” purposes. It may sound absurd to hold Microsoft liable in copyright infringement for illegal file sharing, but I’d encourage you to try to come up with a clear legal test that reaches the Grokster software while simultaneously not reaching Windows XP.
The lower courts didn’t even try. Applying a strong version of Sony, the Ninth Circuit simply ruled that, because Grokster had valid noninfringing uses, it could not be secondarily liable under Sony. In Grokster, the Court – motivated by understandable animus towards Grokster – unanimously reversed. To thread the tricky needle that the lower courts avoided, Justice Souter tried the following language:
We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties. (emphasis added)
The italicized phrase is key. What Souter is trying to do here is to limit liability to parties, like Grokster, that openly and brazenly promote infringement while shielding more neutral hardware and software technology. The idea is that, before you can sue someone, you have to show specific factual evidence of an intent to infringe.
Sounds pretty good right? In theory, this is an excellent solution, and I’m sure it would have made an excellent law review article. The problem is that it’s a terrible terrible terrible rule in practice. It’s not merely that Grokster encourages litigation, it’s that it encourages disingenuous litigation filed only as a negotiating tactic (or as an attempt to get a settlement from a big pocket).