June 24, 2017

RIAA Saber-Rattling against Antispoofing Technologies?

The RIAA has fired a shot across the bow of P2P companies whose products incorporate anti-spoofing technologies, according to a story (subscribers only) in Friday’s National Journal Tech Daily, by Sarah Lai Stirland. The statement came at a Washington panel on the implications of the Grokster decision.

“There’s definitely a lot of spoofing going on on the networks, and nobody thinks that that’s not fair game,” said Cary Sherman, president of the Recording Industry Association of America, on Friday. “Some networks actually put out some anti-spoofing filters to enable people to get around the spoofs, and that may well be a sign of intent.”

The comment came in answer to a question about the kinds of lawsuits that might be brought in the wake of the high court’s decision.

What Sherman is suggesting is that if a P2P vendor includes anti-spoofing technology in their product, that action demonstrates an intent to facilitate infringement, making the vendor liable as an indirect infringer under Grokster.

Perhaps Sherman is asserting that anti-spoofing technologies lack substantial noninfringing uses, and so do not qualify for the Sony Betamax safe harbor. This is wrong in general. It’s well known that some of the files on P2P systems are of low audio or video quality, or are mislabelled altogether. This is true of both infringing and non-infringing files. A technology that can predict which files will have low quality, or which users will be sources of low quality files, will help users find what they want. Spoof files are just low quality files that are inserted deliberately, so technologies that reject low-quality files will tend to reject spoof files, and vice versa.

Of course some particular vendor might introduce such a filter for bad reasons, because they want to abet infringement. But one cannot infer such intent merely from the presence of the filter.

One popular interpretation of Grokster is that the Court said a company’s overall business practices, rather than its technology, will determine its liability. That seems to follow from the Court’s refusal to revise the Sony Betamax rule. And yet Sherman’s complaint here is all about technology choices. Is this the precursor to lawsuits against undesired technologies?

Posner and Becker, Law and Economics

Richard Posner and Gary Becker turn their bloggic attention to the Grokster decision this week. Posner returns to the argument of his Aimster opinion. Becker is more cautious.

After reiterating the economic arguments for and against indirect liability, Posner concludes:

There is a possible middle way that should be considered, and that is to provide a safe harbor to potential contributory infringers who take all reasonable (cost-justified) measures to prevent the use of their product or service by infringers. The measures might be joint with the copyright owners. For example, copyright owners who wanted to be able to sue for contributory infringement might be required, as a condition of being permitted to sue, to place a nonremovable electronic tag on their CDs that a computer would read, identifying the CD or a file downloaded from it as containing copyrighted material. Software producers would be excused from liability for contributory infringement if they designed their software to prevent the copying of a tagged file. This seems a preferable approach to using the judicial system to make a case by case assessment of whether to impose liability for contributory infringement on Grokster-like enterprises.

It’s fascinating that Judge Posner, with his vast knowledge about the law and about economics, avoids a case-by-case law and economics approach and looks instead for a technical deus ex machina. Unfortunately, his knowledge of technology is shakier, and he endorses a technical approach that is already discredited. Nobody knows how to create the indelible marks he asks for, and in any case the system he suggests is easily defeated by encrypting or compressing the content – not to mention the problems with malicious placement of marks. In short, this approach is a non-starter.

Becker is right on the mark here:

But several things concern me about the issues raised by this and related court decisions. I basically do not trust the ability of judges, even those with the best of intentions and competence, to decide the economic future of an industry. Do we really want the courts determining when the fraction of the total value due to legal sales is high enough to exonerate manufacturers from contributory infringement? Neither the wisest courts nor wisest economists have enough knowledge to make that decision in a way that is likely to produce more benefits than harm. Does the fraction of legitimate value have to be higher than 50 per cent, 75 per cent, 10 per cent, or some other number? Courts should consider past trends in these percentages because new uses for say a software-legal or illegal- inevitably emerge over time as users become more familiar with its potential. Must courts have to speculate about future uses of software or other products, speculation likely to be dominated by dreams and hopes rather than firm knowledge?

One of the tenets of the law and economics movement is that decisions about legal regulation of economic behavior should be grounded in a deep understanding of economics. Sound economics can predict the effect of proposed legal rules; but bad economics leads to bad law. As luminaries of the law and economics movement, Posner and Becker understand this as well as anyone.

What is true of economics is equally true of computer science. Only by understanding computer science can we predict the impact of proposed regulations of technology. As we have seen so many times, bad computer science leads to bad law. Posner seems to miss this, but Becker’s stance shows appropriate caution.

One criticism of law and economics is that it works well in a seminar room but may lead to dangerous overconfidence if applied to a hard case by an overworked, generalist judge. One solution is to teach judges more economics, and economic seminars for judges have proliferated. Perhaps the time has come to run seminars in computer science for judges.

BitTorrent: The Next Main Event

Few tears will be shed if Grokster and StreamCast are driven out of business as a result of the Supreme Court’s decision. The companies are far from lovable, and their technology is yesterday’s news anyway.

A much more important issue is what the rules will be for the next generation of technologies. Here the Court did not offer the clarity we might have hoped for, opting instead for what Tim Wu has described as the Miss Manners rule, under which vendors must avoid showing an unseemly interest in infringing uses of their products. This would appear to protect vendors who are honestly uninterested in forstering infringement, as well as those who are very interested but manage to hide it.

Lower courts will be left to apply the Grokster Court’s inducement rule to the facts of other file distribution technologies. How far will lower courts go? Will they go too far?

The litmus test is BitTorrent. Here is a technology that is widely used for both infringing and non-infringing purposes, with infringement probably predominating today. And yet: It was originally created to support noninfringing sharing (of concert recordings, with permission). Its creator, Bram Cohen, seems interested only in noninfringing uses, and has said all the right things about infringement – so consistently that one can only conclude he is sincere. BitTorrent is nicely engineered, offering novel benefits to infringing and noninfringing users alike. It is available for free, so there is no infringement-based business model. In short, BitTorrent looks like a clear example of the kind of dual-use technology that ought to pass the Court’s active inducement test.

A court that followed the Grokster analysis closely would have to let BitTorrent off the hook. To do otherwise, I think, would be to institute a de facto predominant-use test, finding BitTorrent liable because too many of its users infringed. This might be dressed up as an inducement analysis, but it would be clear to everybody what was going on. Given the squishiness of the Grokster analysis, we can’t rule this out.

So the stage is set for the next phase of the copyright/technology litigation war. The music and movie industries don’t want to live in a world where BitTorrent is allowed to exist. The Supreme Court didn’t give them enough yesterday to kill BitTorrent. So the industries’ goal will be to stretch the Grokster rule, just as they tried to stretch the Sony rule before hitting a sandbar in the Grokster district court. We’ll see a careful campaign of litigation against peer-to-peer services, trying to gradually stretch the noose of inducement liability until it fits around BitTorrent’s neck. Failing that, we’ll see a push to get Congress to codify (the industries’ interepretation of) the Grokster rule.

The real winners, as usual, are the copyright lawyers.