Court ruling may affect our gadgets, technologies

July 21, 2005|By MIKE HIMOWITZ

THIS WEEK'S angst over a vacancy on the Supreme Court makes it obvious how many Americans believe that a single vote can change the course of American history.

But beyond a handful of hot-button social issues, you'll find a court that splits in some very unpredictable ways over issues that are less visible but just as contested - and in many ways closer to our day-to-day lives. In some hot cases, the justices don't split at all.

Consider last month's decision in the Grokster case, in which a unanimous court held that businesses that affirmatively encourage copyright infringement can be held responsible for the actions of their customers.

In real terms, it means the entertainment industry can sue the purveyors of file-swapping software used by tens of millions to trade music and movies over the Internet - mostly illegally. If you haven't done it yourself, you probably know someone who has: Ask almost any kid with a computer and an Internet connection.

But the decision could ultimately affect many of the gadgets and technologies we take for granted today. They include portable music and video players, CD and DVD burners and software that let us exchange all kinds of information over the Internet - not just music and movies.

For example, I can use a CD or DVD burner to back up my hard drive, which is fine. Or I can use it make copies of music CDs and movies for my friends - which is not.

The court ruled that the people who make devices with legal and illegal uses have some responsibility to make sure that they're used properly. But how far do they have to go?

By way of analogy, should automakers be required to build breathalyzers into the ignition systems of their cars to make sure motorists don't drink and drive?

The devil, as always, is in the details. But the decision was a major victory for music and motion picture makers in what has been a bizarre war against their very best customers -with hundreds of millions, if not billions, of dollars at stake.

The recording studios blame illegal swapping of digital album tracks for their dismal performance in recent years. Movie makers are horrified that illegal copies of their hottest films circulate on the Internet before they are released in theaters.

The entertainment industry hoped the court would reverse the course it took in its landmark 1984 Betamax decision. There, the justices held that it's legal to manufacture and sell videocassette recorders because they have perfectly legitimate purposes - even though they can also be used to make illegal copies of movies.

In separate cases filed in 2003, lower courts ruled that the Betamax principle protected Grokster and Streamcast from lawsuits. But this time, the Supremes overturned their lower court brethren and gave the industry some of what it wanted, if not all.

In an unusual but ultimately logical twist, they based their ruling not on the capabilities of the software, but on the conduct of the publishers. The question was whether they actively encouraged the use of their software for illegal copying.

In his majority opinion, Justice David H. Souter wrote, "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement."

The court didn't rule on the specifics of Grokster and Streamcast's conduct, but sent the case back to the lower court to determine whether they had in fact actively encouraged illegal file trading - or at least failed to take basic precautions to discourage it.

That will lead to even more rounds of litigation. And technology companies - which have made billions from digital hardware and software that puts users in charge of their entertainment - are worried that they will now be litigated to death.

It's not idle speculation. The entertainment industry has thrown armies of lawyers into lawsuits suits against everyone remotely connected with file sharing - from the makers of portable music players to 12-year-olds who post Britney Spears tracks online.

They've shut down hundreds of individual file sharers. But those lawsuits are inefficient and unpopular with the very customers the studios are trying to court. The Grokster decision gives them much broader targets.

Major manufacturers undoubtedly have pockets deep enough to defend themselves. But critics say the intentionally vague ruling could discourage small, innovative companies from developing new technologies because they fear ruinous lawsuits.

As some early innovators learned after being bled to death by legal fees, you don't have to be in the wrong to be on the losing side.

"We need clear, bright-line rules so that technology companies can know in advance what they are and are not allowed to build," Fred von Lohmann, a lawyer for the Electronic Frontier Foundation, said this week at a gathering sponsored by the advisory committee to the Congressional Internet Caucus.

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