MESSAGE
| DATE | 2005-03-26 |
| FROM | Ruben Safir
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| SUBJECT | Subject: [hangout] File Sharing P2P
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Posted on Sat, Mar. 26, 2005
Grokster case pits tech innovation vs. Hollywood's rights
By Dawn C. Chmielewski
Mercury News
Silicon Valley and Hollywood face off before the Supreme Court on
Tuesday in a closely watched case that could determine if technologies
like TiVo and the iPod are developed in the future.
At issue in MGM vs. Grokster is whether the makers of file-sharing
software should be held liable when people use their products to
illegally download copyrighted music and movies.
The court ruled in a 1984 case involving the Sony Betamax videocassette
recorder that as long as a technology has a substantial legitimate use,
manufacturers cannot be found liable for copyright violations committed
by people who use their products. As music, movies and other
entertainment became so many 1s and 0s easily reproduced at the touch of
a button, the Betamax standard allowed companies to develop CD burners,
DVD players and other technologies without fear of being sued every time
a customer makes copies of a song or TV show.
Now the entertainment industry wants to change the rules of the game. It
has asked the Supreme Court to revise the Betamax standard so that only
companies whose technologies' ``primary use'' is legitimate can be
shielded from being hauled into court.
The distinction may sound trivial, but Silicon Valley companies say it
could jeopardize their ability to create the next big thing.
That's because no one knows exactly what consumers will do with any new
technology. If companies risk being sued for developing, say, the next
iPod, they might choose to play it safe, according to Lawrence Lessig,
the Stanford University law professor who has written extensively about
copyright in the digital age.
``The practical effect of the rule that they're trying to get the court
to adopt would be to impose extremely high costs on innovation,'' said
Lessig.
Jason Krikorian, co-founder of San Mateo's Sling Media, agreed.
``It's very difficult to guess how consumers are going to use the
product. People are very creative. I just think it's an undue burden on
entrepreneurs,'' said Krikorian, whose company is making a device that
lets consumers watch television programs from anywhere with an Internet
connection.
With the Grokster case hanging over their heads, small companies like
Kaleidescape in Mountain View now have their lawyers peer over their
engineers' shoulders.
Kaleidescape Chief Executive Michael Malcolm said the company's
attorneys advised changing the design of its home entertainment computer
server, which stores thousands of movies, so that it would be impossible
to copy rented or borrowed DVDs.
``My fear is if a company is faced with having to carry on a long
litigation just to demonstrate that it has done everything it can to
prevent infringing uses, it's going to kill most companies that would be
innovating,'' said Malcolm.
Venture capital firms have already begun to avoid certain types of
investments deemed too legally risky, said Hank Barry, a partner at VC
firm Hummer Winblad Venture Partners who served as the CEO of the
original Napster.
``Not only at the venture level, but at the entrepreneurial level, what
this has done is make people very reluctant to invest in these sorts of
technologies,'' said Barry. ``The problem is that when you're in a
start-up, even if you're right, it doesn't matter. Because you can't
afford to litigate. And if you're an investor, you don't want all your
money to go to litigation.''
The entertainment industry rejects the idea that it is trying to quash
innovation, saying it just wants to hold responsible file-sharing
services whose main business is to profit from the illegal downloading
of other people's music and movies.
``What we are trying to do here, we're trying to set some standards that
encourage responsible behavior of citizens in a responsible society,''
said Dan Glickman, president and chief executive of the Motion Picture
Association of America. ``You can't get something for nothing.''
Entertainment-industry attorneys also note tech companies could avoid
liability by taking technological measures to halt piracy.
But Donald M. Whiteside, Intel's director of technology policy, worries
that other companies could be sued for enabling copyright infringement
through file-sharing services.
``We know that everyone who's a peer-to-peer user is using a PC,'' said
Whiteside. ``Sixty million people aren't accessing it through
teleportation. That's what really brings this home for us.''
________________________________________________________________________
Contact Dawn C. Chmielewski at dchmielewski-at- mercurynews.com or (800)
643-1902.
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