P2P Policy Will Be Shaped by Lower Courts, Pundits Say
Experts on the MGM v. Grokster case differed on whether Congress should try to legislate on the growing copyright infringement problem following the historic Supreme Court decision (WID June 28 p1) during a Capitol Hill lunch Tues. But pundits on both sides of the war between the content and high-tech industries seemed to agree the 108th Congress’s Induce Act fiasco, which imploded during Congressional negotiations, left a bad taste in policymakers’ mouths. The failed measure would have held technology companies liable for creating devices used largely for piracy.
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The Supreme Court presented a balanced, commonsensical standard, despite what opponents think, and the lower courts should get the time to apply it, said entertainment industry attorney Donald Verrilli. In their unanimous decision, the justices argued powerfully for imposing indirect liability, he said. When a widely shared service or product is used to commit infringement, it may be impossible to protect copyright from all direct infringers, Justice David Souter said in the court’s opinion. The only practical alternative is to pursue the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement, the court said. “The court got the basic idea right,” Verrilli said, saying now isn’t the time for lawmakers to dirty their hands with the issue. IEEE-USA Vice Chmn.- Intellectual Property Committee Andrew Greenberg said Congress should simply be “monitoring carefully as Grokster gets more clearly articulated by lower courts.”
Verrilli and panelist Fred von Lohmann, senior staff attorney for the Electronic Frontier Foundation (EFF), would like to see balance in dealing with emerging technology and copyright issues, but they differ on where to strike that balance. The Supreme Court didn’t answer most of the hard questions, von Lohmann argued, saying no more light was shed on how to interpret 1984’s landmark Sony Betamax ruling today. Von Lohmann said the high court also punted on an entertainment industry argument throughout the legal battle that as long as technologies could have been designed to be less susceptible to infringing use, those firms should be he held responsible. “With all due respect, I don’t think uncertainty is balance,” he said.
It would be hard for Congress to answer these questions but it has two options. The first is by working toward a “sensible solution for the P2p problem,” von Lohmann said. Lawmakers have to talk about ways to compensate artists and copyright owners for their creations because P2P will live on regardless of court decisions and political pressures, he said. There should be a way to raise “a reasonable amount of money and divide it up” among content creators -- a method akin to how creators are compensated for radio broadcasts. Such a solution could “turn [P2P networks] into a paid source of revenue for copyright owners,” von Lohmann said.
A step in the right direction would be for Congress to start reforming copyright law by axing the Sec. 115 compulsory license provision in favor of collective administration -- a proposal addressed in several recent committee hearings (WID July 13 p3, June 22 p1). The awarding of statutory damages in secondary liability cases also should come off the table, a step lawmakers could push for, von Lohmann said. Under the extant structure, copyright owners are entitled to as much as $150 per work infringed, he said, so a single music-filled iPod could yield half a billion dollars in damages, he said. That’s not what Congress had in mind when it drafted copyright laws, von Lohmann added. In a revised system, copyright holders still could sue for injunctive relief and for actual damages inflicted from infringement, but innovators wouldn’t suffer for fear of being put out of business by one wrong move. In short, the Supreme Court “left us with a real legal minefield” in which lawyers are unsure of how to advise clients about what might constitute as infringement, he said.
Web-related discussion on Capitol Hill continued Tues. evening as Congressional Internet Caucus Co-Chmn. Goodlatte (R-Va.) and Boucher (D-Va.) and European Internet Foundation counterparts discussed hot-button high-tech topics with U.S. lawmakers and visiting members of the European Parliament. Officials stressed the need for more international cooperation on key issues and the need for more unified priority setting by high-tech stakeholders here and across the pond.
The European delegation, which includes 7 MEPs from the U.K., Germany and Hungary, is in Washington this week to meet with Internet policymakers. On Mon., the group met with FTC Chmn. Deborah Majoras and Comr. Jon Leibowitz to discuss data security, spyware, spam and related issues. Afterward, it was on to the FCC to talk telecom and VoIP, a spokeswoman for the Congressional Internet Caucus said. The group also met with Commerce Dept. officials on RFID and data retention. Tues., the group met with Justice Dept. computer crimes experts and House Consumer Protection Subcommittee Chmn. Stearns (R-Fla.). Today (Wed.), delegates are scheduled to discuss homeland security issues with Rep. Lofgren (D-Cal.) and meet with David Gross, State Dept. international communications & information coordinator.