Most independent analysts agree that the entertainment industry didn’t get what it wanted from the Supreme Court’s Grokster ruling. Things look grim for the Grokster defendants themselves; but what the industry really wanted from the Court was a ruling that a communication technologies that are widely used to infringe should not be allowed to exist, regardless of the behavior and intentions of the technologies’ creators. The Court rejected this theory.

Last week the Senate Commerce Committee held a hearing (a video stream is available) on the Grokster aftermath. This was a chance for witnesses representing various interests to put their official spin on the Grokster ruling. All of the witnesses praised the ruling and asked Congress to wait and see what develops, rather than legislating right away. But different witnesses put different spins on the ruling.

The entertainment industry line was presented by Mitch Bainwol of the RIAA, Fritz Attaway of the MPAA, and Gregory Kerber of Wurld Media (a music distribution service). Their strategy was essentially to pretend that the Court did give the industry what it wanted, and that P2P technologies were now presumptively illegal unless they had cut licensing deals with the industry. They didn’t argue this directly, but the message was clear. For example, they tried to draw a line between “legitimate” P2P technologies and others, where legitimacy was apparently achieved by signing a licensing deal with major recording or movie companies.

For example, in response to concerns from Mark Heesen of the National Venture Capital Association about venture capitalists’ fears of financial ruin from investing in even well-intentioned communication technology companies, Mr. Kerber said this:

It’s very clear how you get investment. The rules are there. We’re a P2P – we’re a real peer-to-peer – it’s centrally controlled, we can control that … we can respect the copyright holder’s wants during – through a contractual process.

And the way that investors realize that is when we go out and get deals with the record labels, movie studios; and … the venture capitalists do their due diligence, they call and they find out that … the content owner of these assets [says] yes, we will allow this to be transferred and distributed and sold … within – on the network.

So … it’s very, very clear. If you have a contract with a major label, indy label, movie studio, publisher, what they have said is, we will allow the content to be sold in this manner across our network. So I’m a little confused by – there’s an absolute clear path for an investor to understand what’s right and wrong in the process.

It’s a simple message. Investing in technologies that have been blessed by the entertainment industry: right; investing in other technologies: wrong.

But it’s not what the Court said. The Court rejected the proposition that P2P or other communication technologies can exist only at the pleasure of the entertainment industry.

Despite this, we can expect to hear more of this rhetoric of “legitimacy”. And when P2P technologies continue to exist and be popular, we can expect calls for legislation to control the scourge of “illegitimacy”.

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?