The biggest issue in the Grokster case is whether the Supreme Court adjusts or clarifies its precedent from the Sony Betamax case. The fate of Grokster itself is much less important than what ground rules the Court imposes on future innovators.
The core of the Betamax opinion is this oft-quoted passage:
The staple article of commerce doctrine must strike a balance between a copyright holder’s legitimate demand for effective – not merely symbolic – protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.
There are two ideas here: the need to balance the interests of copyright holders against the interests of others, and, following from this need for balance, immunity from contributory infringement for devices sufficiently capable of noninfringing use. Grokster often argues from the immunity language. The studios often argue from the balance language, asserting that Grokster’s reading of the immunity language is inconsistent with the balance language. Many of the briefs filed on Monday take this latter angle.
What’s interesting is that most of those briefs, though relying heavily on balance arguments, seem to miss an important aspect of Betamax’s balance language. They do this by setting up a balancing test between the interests of copyright owners and the interests of Grokster. But that’s not quite the balance that Betamax is talking about.
The Betamax court would balance the interests of copyright holders against those of “others freely to engage in [noninfringing] areas of commerce.” Here “others” refers not only to the maker of the challenged product (here, Grokster) but to everybody who benefits from the product’s existence. This includes users who benefit from noninfringing uses of the product, musicians or publishers who use the product to disseminate their work, users who will benefit from not-yet-discovered uses of the product, developers of future noninfringing products who learn from seeing the product in operation, and so on. These benefits are often diverse, diffuse, and difficult to foresee, which is why the Betamax court was cautious about imposing liability for infant technologies.
I’ve read most of the briefs filed in Monday’s group. Of these, I’ve seen only three that seem to understand this point about what interests need to be balanced. These three come from the video store dealers; a group of professors (Kenneth Arrow et al.); and IEEE-USA. These briefs differ in their ultimate conclusions, which is not surprising. Understanding which interests need to be balanced is only a starting point for analysis.