Grokster - A Summary of The Piracy Argument

A Summary of The Piracy Argument

It has been estimated that 90% of files shared on Grokster were downloaded illegally. Whether such downloads have substantially affected the retail sales of music, videos, and other works protected by copyright and the intellectual property laws is a matter of debate. Grokster claimed they did not violate any copyright laws because no files passed through their computers. They assigned certain user computers as "root supernodes" that acted as music hubs for their company. Thus they were not responsible for controlling any specific file downloads.

The key issue in the copyright infringement case was the so-called 'Sony safe-harbor' principle that was set by the Supreme Court over 21 years ago in Sony v. Universal Studios 464 U.S. 417 (1984). The ruling stated that, "…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 non-infringing uses." (Sony 464 U.S. at 442). This case challenged the legality of using VTR’s to copy content using Betamax tapes. Grokster argued that proof of reasonable, actual or potential, non-infringing use, is sufficient to fulfil the "substantiality" requirement. The RIAA and MPAA argued that Sony safe-harbor requires proof that the non-infringing use is the primary one; an incidental non-infringing use is not enough.

Among the amicus curiae briefs:

• The U.S. government proposed that a manufacturer of technological device will be protected by Sony safe-harbor only if the non-infringing uses are commercially significant compared to the infringing uses.
• A group of law and economic professors (among them Professors Kenneth J. Arrow, and William M. Landes) argue that the test whether the non-infringing use is substantial, requires an examination of all the existing legal mechanisms for accomplishing the same task. The example given is the distribution of the Bible. This is lawfully available through peer-to-peer file sharing software and is therefore a non-infringing use. But many religious websites offer a free copy. Thus, since downloading the Bible through peer-to-peer file sharing software is an addition to the list of well-established legitimate methods for obtaining a free Bible, the benefits of this addition are not substantial and the overall use of P2P software should not be considered a non-infringing use.
• The cost-benefit analysis, first introduced by Judge Posner from the 7th Circuit Court of Appeals in the Aimster case, holds that a manufacturer of technological device will enjoy the Sony safe-harbor only if "...it would have been disproportionately costly for him to eliminate or at least reduce substantially the infringing uses."
• The Creative Commons organization presented a strong argument for non-infringing use in the form of the Creative Commons licence, despite the fact that the architecture of the software did not allow for the licence information to be transferred.