Grokster Ruling: Instant Analysis

Judge Wilson’s opinion, dismissing the music industry suit against Grokster and Morpheus, contains few surprises beyond the result itself.

Judge Wilson ruled, essentially, that although some users of the defendants’ P2P software used the software to infringe copyrights, this infringing activity was beyond the control of the defendants. Unlike Napster, these defendants had no active, ongoing involvement in the infringing activity, and hence had no ability to stop it. Simply creating a product that was capable of infringing uses was not enough to support either contributory or vicarious liability. To hold otherwise, the judge said, would be contrary to established precedent and would make common products like photocopiers illegal.

For example, here is the judge’s reasoning in disposing of the vicarious infringement claim:

While the parties dispute what Defendants feasibly could do to alter their software, unlike in Napster, there is no admissible evidence before the Court indicating that Defendants have the ability to supervise and control the infringing conduct (all of which occurs after the product has passed to end users). The doctrine of vicarious infringement does not contemplate liability based upon the fact that a product could be made such that it is less susceptible to unlawful use, where no control over the user of the product exists.

The most important part of the opinion is at the end:

The Court is not blind to the possibility that Defendants may have intentionally structured their businesses to avoid secondary liability for copyright infringement, while benefitting financially from the illicit draw of their wares. While the Court need not decide whether steps could be taken to reduce the susceptibility of such software to unlawful use, assuming such steps could be taken, additional legislative guidance may be well-counseled.

To justify a judicial remedy, however, Plaintiffs invite this Court to expand existing copyright law beyond its well-drawn boundaries. As the Supreme Court has observed, courts must tread lightly in circumstances such as these:

The judiciary’s reluctance to expand the protections afforded by the copyright without explicit legislative guidance is a recurring theme. [Citations.] Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accomodate fully the raised permutations of competing interests that are inevitably implicated by such new technology.

In a case like this, in which Congress has not plainly marked our course, we must be circumspect in contruing the scope of rights created by a legislative enactment which never calculated such a calculus of interests.

Unless this decision is overturned quickly on appeal, the P2P policy battle will now move to Washington. Having lost in the Courts, the content industry will take the judge’s hint and lobby Congress to pass legislation changing the rules. My prediction is that we’ll see a bill circulated that creates an affirmative responsiblity to design products that make infringement as difficult as possible.