The 463: Inside Tech

Grokster: Sony Lives; So Do Lawyers

Many were worried in the tech industry that that Grokster decision would scuttle the innovation-driving Sony Betamax decision.  While the court addressed it, the opinion also said that MGM v. Grokster had very little to do with the landmark 1984 case.

From the opinion:

We are, of course, mindful of the need to keep from trenching on regular  commerce  or  discouraging  the  development  of technologies with lawful and unlawful potential.  Accordingly, just  as  Sony  did  not  find  intentional  inducement despite the knowledge of the VCR  manufacturer  that its device  could  be  used  to  infringe,  464  U. S.,  at  439,  n. 19, mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to  liability.    Nor  would  ordinary  acts  incident  to  product distribution, such as offering customers technical support or  product  updates,  support  liability  in  themselves. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise.

In sum, this case is significantly different from Sony and reliance  on  that  case  to  rule  in  favor  of  StreamCast  and Grokster  was  error. Sony  dealt  with  a  claim  of  liability based  solely  on  distributing  a  product  with  alternative lawful and unlawful uses, with knowledge that some users would follow the unlawful course.  The case struck a balance between the interests of protection and innovation by holding that the product's capability of substantial lawful employment should bar the imputation of fault and consequent secondary liability for the unlawful acts of others.

Many are saying that this ruling is a win for both the content and technology industries.  About this, even both (frequent combatants) Public Knowledge and PFF can find room for agreement. PK says:

Grokster: Modest Mouse vs. Decameron

"While there is doubtless some demand for free Shakespeare, the evidence shows that substantive volume  is  a  function  of  free  access  to  copyrighted  work.   Users  seeking  Top  40  songs,  for  example,  or  the  latest release  by  Modest  Mouse,  are  certain  to  be  far  more  numerous  than  those  seeking  a  free  Decameron,  and  Grokster and StreamCast translated that demand into dollars."

From the unanimous decision in favor of MGM.  The opinion primarily focuses why the court believes that Grokster, et al, can sued by the RIAA and others for inducing piracy on their networks.  What will be disected in the hours to come is how the wording of the opinion balances punishing infringers and not a particular technology -- a core argument of the tech industry.

AP coverage here.  Tech Law Advisor review of blogs and coverage here.

FCC's Institutional Memory Joins Cisco

The Washington Post's "In the Loop Column" reports that Bob Pepper, an institution at the FCC, one of the nation's leading telecom policy experts and an overall good guy, is heading to the private sector to join Cisco.  There's probably no one out there who has more institutional knowledge and memory of the FCC than Dr. Pepper.  More on the Post story here.

Cisco on eHealth

Excerpts from a San Jose Mercury News op-ed from Cisco Healthcare Practice VP Dr. Jeffrey Rideout...

In the past 20 years, information technology has revolutionized virtually every facet of our lives. Unfortunately, one of the areas in which the revolution has been slow in coming is arguably the most important from a human and financial standpoint: our health care system.

There are signs that this is finally changing. Health and Human Services Secretary Mike Leavitt signaled this week that the Bush administration will play a strong role in driving health care IT standards that are crucial for electronic health records to gain traction. The adoption of electronic health records will do more than just streamline our health care system and curb costs. It also will enable clinicians and hospitals to gain better information about a patient's health history, which will improve medical care and save lives....

The Complexities of Music

We're not talking about Bach, Frank Zappa or DJ Shadow.  We're talking about how spellbindingly complex the process of licensing music is.

We just brought up the actions of the US Copyright Office  (Bigger than Grokster?) in taking the first steps to possibly creating a new content licensing methodology and how important it will ultimately be when solutions are created in a post-Grokster decision world.

But, as they say, the journey could be a lot more interesting than the destination.  And, the inherent complexities of the copyright process could make it incredibly important for the technology industry to remain vigilant during the legislative process.  After all, there is simply no way that more than a handful of congressional offices will be able to fully comprehend and drive policy development here.  It's not that others are dumb or disinterested. It's just that they have a million other priorities and will naturally gravitate towards issues that you quickly grasp and master.  When the can't do that, they'll take the advice of trusted advisors and supporters.  There's a good chance that not all these well-paid souls from K Street will have the tech industry's best interests always at heart.

How complex are these issues?  Consider....

Bigger than Grokster?

The Grokster decision will be front page news.  And, as thoroughly discussed on The 463, it will have massive ramifications on state and federal legislation to come -- not to mention how people enjoy and use entertainment content.

However, something else happened this week in digital copyright land that could create a chain of events that could be just as big as MGM v. Grokster.  Yet, no one has written about it in any mainstream media outlet.  For one the issue is arcane (read: boring to some) and even the experts are slightly confounded over what the true implications could be. 

The happening?  The U.S. Copyright Office (which is part of the Library of Congress and advises Congress on copyright law) announced this week it recommends that a critical piece of the country's copyright scheme be rejiggered to do away with what is known as a compulsory license....

Grokster at the Door

eWeek's Chris Nolan tells you why the Grokster decision matters here.  An exceprt...

Grokster is the first major digital technology case to appear before the court. And the opinion issued in this case is expected to play a big role in framing debates over copyright and perhaps even telecommunitcations legislation in Congress.

The Surpeme Court decision could be made at almost any point now.  Some are guessing it will happen tomorrow morning (Friday) at 7:00 am PT.  For more predictions on the what could happen and the implications see here and here.  CNET/ZDNet also ran this report on the implications of the case this week.

Plaxo Chief: Social Network for Good; Not Annoying

Ben Golub, CEO of Plaxo and a friend of 463, has some very interesting commentary on social networking over at news.com.   

The money paragraph: "Social networking technology is a great tool. But, like most powerful tools, it can be misused. If you value your relationships, remember that the true strength of most relationships is determined by the content of the relationship and the effort invested by both parties, rather than the mechanism that established the relationship in the first place." 

The full column is here.   Other excerpts....

Study: iTunes More Popular Than The Beatles

We love iTunes.  We  want Real, Yahoo! and Napster to succeed with their music subscription efforts (and do we hear Microsoft knocking?).  We also think companies like Grokster shouldn't be allowed to make money off illegal distribution of content.

However, we also want to really know what's going on in the digital music market as we enter a critical time of policy debate.

A study came out this week which purports:  "iTunes More Popular Than Most Peer-to-Peer File Sharing Services".  And continues:

Microsoft Goes to Hollywood

A common theme at The 463 is how new technologies are bringing big industries together and how this results in simultaneous deal-making and knee-breaking.

Case in point, there is a fascinating story today in the New York Times about what happened to Microsoft when the tried to extract unprecedented terms when looking for a studio partner to produce the movie version of their video game "Halo".  An excerpt of the piece: