February 28, 2020

eDonkey Seeks Record Industry Deal

Derek Slater points to last week’s Senate hearing testimony by Sam Yagan, President of MetaMachine, the distributor of the popular eDonkey peer-to-peer file sharing software.

The hearing’s topic was “Protecting Copyright and Innovation in a Post-Grokster World”. Had the Supreme Court drawn a clearer legal line in its Grokster decision, we wouldn’t have needed such a hearing. But the Court instead chose to create a vague new inducement standard that will apparently ensnare Grokster, but that leaves us in the dark about the boundaries of copyright liability for distributors of file sharing technologies.

It has long been rumored that the record and movie industries avoided dealmaking with P2P companies during the Grokster case, because deals would undercut the industry’s efforts to paint P2P as an outlaw technology. Yagan asserts that these rumors are true:

[MetaMachine] held multiple meetings with major music labels and publishers as well as movie studios, and at one point, received verbal commitments from major entertainment firms to proceed with proof-of-concept technical testing and market trials.

The firms later rescinded these approvals, however, with the private explanation that to proceed in collaboration with eDonkey on a business solution, or even to appear to be doing so, could jeopardize the case of the petitioners in the pending MGM v. Grokster litigation.

An obvious question now is whether the record industry will sue MetaMachine on a Grokster-based inducement theory. The industry did send a cease-and-desist letter to MetaMachine, along with several other P2P vendors. Yagan asserted that MetaMachine could successfully defend a recording industry lawsuit. I don’t know whether that’s right – I don’t have access to the facts upon which a court would decide whether MetaMachine has induced infringement – but it’s at least plausible.

Whether MetaMachine could actually win such a suit is irrelevant, though, because the company can’t afford to fight a suit, and can’t afford to risk the very high statutory damages it would face if it lost. So, Yagan said, MetaMachine has no choice but to make a deal now, on the record industry’s terms.

Because we cannot afford to fight a lawsuit – even one we think we would win – we have instead prepared to convert eDonkey’s user base to an online content retailer operating in a “closed” P2P environment. I expect such a transaction to take place as soon as we can reach a settlement with the RIAA. We hope that the RIAA and other rights holders will be happy with our decision to comply with their request and will appreciate our cooperation to convert eDonkey users to a sanctioned P2P environment.

MetaMachine has decided, in other words, that it is infeasible to sell P2P tools without the record industry’s blessing. The Supreme Court said pretty clearly in its Grokster decision that record industry approval is not a necessary precondition for a P2P technology to be legal. But record industry approval may be a practical necessity nonetheless. Certainly, the industry is energetically spreading the notion that when it comes to P2P systems, “legitimate” is a synonym for “approved by the record industry”.

But just when we’re starting to feel sympathy for Yagan and MetaMachine as victims of copyright overreaching, he does some overreaching of his own. eDonkey faces competition from a compatible, free program called eMule; and Yagan wants eMule shut down.

Not only have the eMule distributors adopted a confusingly similar name, but they also designed their application to communicate with our eDonkey clients using our protocol.

In other words, eMule clients basically camouflage themselves as eDonkey clients in order to download files from eDonkey users. As a result, eMule computers actually usurp some of the bandwidth that should be allocated to eDonkey file transfers, degrading the experience of eDonkey users.

Ignoring the loaded language, what’s happening here is that the eMule program is compatible with eDonkey, so that eMule users and eDonkey users can share files with each other. This isn’t illegal, and Yagan offers no argument that it is. Indeed, his testimony is artfully worded to give the impression, without actually saying so, that creating compatible software without permission is clearly illegal. I guess he figures that if we’re going to have copyright maximalism, we might as well have it for everybody.

There’s more interesting stuff in Yagan’s testimony, but I’m out of space here. Mark Lemley’s testimony is interesting too, offering some thoughful suggestions.

Comments

  1. What Yagan fails to mention in this paragraph is that in addition to the ability to “usurp some of the bandwidth that should be allocated to eDonkey file transfers”, the eMule client also provides bandwidth to the network, making the eDonky client download faster, enhancing the eDonkey user experience.

  2. To expand a bit on Ariks comment: the eDonkey protocol is similar to the BitTorrent protocol in that every user downloading a particular file is also uploading it to others.

    This, of course, means that increasing the number of users improves the expirience for everyone. Not only because the selection of available files goes up, but also because downloading popular files is often faster.

    This makes Yagans comments especially misleading.

  3. I don’t see how P2P companies can work out deals with the music industry when even Microsoft cannot do it:

    http://www.theinquirer.net/?article=26692

    And let’s not forget that the music industry is even trying to screw the successful and profitable (for the music industry) iTunes too.

    http://www.pcmag.com/article2/0,1895,1862166,00.asp

    I think Dvorak is right. The music industry does NOT want third party on-line music services to succeed. So extrapolating from that, P2P does not stand any chance to gain legitimate deals with the music industry.

    Dvorak’s premise is that throughout its history the music industry has fudged its sales numbers to either hype artists or to keep paying artists. But with a third party keeping track of exactly what sells, suddenly the music industry loses control.

    What would be interesting is if the music industry created or bought a P2P service with users paying a monthly fee. The numbers would be under their control and they’d get a monthly stipend from users without suffering any real costs.

  4. I am amazed that the music and movie industry can pull off these stunts. P2P is just a way to share files. It does not mean you share illegal files. Of course some people will use it for illegal purposes, but should technology and evolution stop because of that? Should we outlaw cars because bank robbers use them as escape vehicles? Should we outlaw telephones because criminals use them to make drug deals. The whole discussion is absurd.
    Stop petting the media industry and get real…
    Catch criminals and not technologies…!

  5. right on mike!

  6. In Mike’s post, if you substituted the word “most” for “some” (let’s be honest here, ok?) and re-read it, then yes, cars would likely be outlawed if -most- people used them as getaway vehicles. That’s what we’re really talking about here: most, not some. Hey, I’m a big-time P2Per and music/movie leecher, and I don’t pretend to be otherwise. I’m just saying to pretend that P2P clients are only occasionally used to share illegal files is dishonest in itself, and everyone knows it, and the apparent cleverness of Mike’s argument fools nobody. So to all of you I say “AAAAAARRR MATIES! GO GIT THEM THAR FILES!!” But don’t pretend you’re just using eMule or whatever to trade cake recipes, or download copyright-expired Shakespeare plays and Dickens novels that are already freely available from the Gutenburg site.