Yesterday the US Supreme Court published their 55-page decision in MGM v. Grokster case. The headline summary? The file-sharing software companies lost and the media companies won. Delve a little deeper and it becomes more confusion.
Predictably reaction has been mixed. The Motion Picture Association of America (MPAA) hailed the court’s ruling as a “historic victory for intellectual property in the digital age.” On the other side of the fence, the EFF reaction was an expected contrast, “Today the Supreme Court has unleashed a new era of legal uncertainty on America’s innovators,” said Fred von Lohmann, EFF’s senior intellectual property attorney. “The newly announced inducement theory of copyright liability will fuel a new generation of entertainment industry lawsuits against technology companies. Perhaps more important, the threat of legal costs may lead technology companies to modify their products to please Hollywood instead of consumers.”
Background – How have we got here
As is well documented, the US media companies have been taking legal people who have previous been their customers, accusing them sharing music and films without authorisation. In many cases these people, or their parents have opted to pay a thousands of dollars in damages to the music companies, rather than risk going to court to defend themselves.
The media companies have found this approach very expensive as each of the people using the filesharing software has to be tracked down and pursued individually. As the file-sharing networks have millions of people using them at any given times, this is not a realistic way for them to stop these actions.
The media companies have, through their well-know and influential political lobbying, attempted various approaches to stop their media being shared without their permission – the most extreme so far was trying to make using P2P software illegal in the US. Happily, so far, this extreme idea hasn’t been successful.
Broad-brush approaches like this hurt the innocent as well as the people the media companies want to stop. P2P software such as BitTorrent is simply more efficient, economical way to distribute large file, such as audio and video. Digital-Lifestyles often uses BitTorrent as it reduces our hosting charges, as people who download the file also become distributors of the file, reducing the load on our servers.
Taking the direct approach
While going after individuals has, in the eyes of the media companies, has been successful, it’s expensive and time consuming. Yesterday’s ruling was about going after the makers of the file-sharing software – with the logic being, if you close them down, people won’t be able to share files.
Back in 2001 28 of the world’s largest entertainment companies started this legal action against the makers of the Morpheus, Grokster, and KaZaA filesharing software products. A number of legal cases have already been fought in the lower US courts, with the most recent finding going in favour of the defending file-sharing companies – Grokster and StreamCast, makers of Morpheus.
The Electronic Freedom Foundation (EFF), who have been assisting the software companies in their defense, felt a precedent had already been made for this. Back in the 1984 the US film studios went after the makers of video recorders, claiming that if there were to be sold the whole of the film-making business would vanish. The Sony vs Universal Studios case, or The Betamax Case, as it has more popularly become known, ruled that the manufacturer of a piece of equipment could not be held liable of uses that might infringe copyright. In legal circles this is know as Secondary liability.
(By a twist of corporate fate, Sony now owns MGM)
Where we are now
The ruling yesterday appears to be contrary to the findings of the Betamax Case. Justice David Souter said “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”
If a company makes and sells a device that is then used to distribute copyrighted material, the company is acting illegally.
While the court case is about software, it is important to note that the ruling isn’t just about software, it talks of a ‘device’. So this ruling could have impact on any service or piece of equipment that handles copyrighted material, be that Google, TiVo, iPod, etc.
While the media companies have met the ruling with excitement and delight, others are quite as sure. The sticking point is the use of the word Intent.
John Barrett, Director of Research at Parks Associates told Tom’s Hardware “I suspect [litigants] will spend the next five to ten years arguing over what exactly is ‘intent.’ The issue is, is it enough if you make everybody digitally sign off on some disclaimer that says, ‘I’m not going to use it to trade illegal files?'” Will networks have to actively search for and purge illegal files, or filter out files from being disseminated, or only allow certified content to be traded? Barrett asks. “It’s going to be a mess, because you’ve got to start down that road where the P2P guys are obviously going to try to paper over something with some disclaimers and a few splashy warnings, that just get ignored by everybody.” By way of comparison Barrett added, “It’s the same thing as when you go to the college library, [and] you see this little sign by the Xerox machine saying, ‘Copyright infringement in this area is a crime, etc., etc.,’ and then everybody just copied the books and ignored the sign.”
Others have brought forward the comparison with gun manufacturers. When guns are designed and manufactured these companies are not called to account when someone is shot dead by one of their products – considerably more serious that someone copying a piece of music or a film. The cited argument is “Guns don’t kill people, people do.”
What the future will hold?
Well, the debate will rage on both sides as to the long terms effect of this ruling.
On the legal front, the case has been sent back down to lower courts in the US, where the future fate of the file-sharing companies could be sealed.
Beyond that, many man-years of chargeable legal hours will be racked up as spectrum of companies try to understand how they are effected.
Many companies or trade organisation that have any thing to do with Intellectual Property Rights (IPR) will come out in the press supporting the ruling, many other will come out decrying it.
There will be a lot of people in tech companies convening meetings attempting to work out if they or their products could be affected by this ruling. Companies will examine their own internal processes in an attempt to understand if they could be found guilt of providing intent of copyright infringement.
As to whether this will impact the very existence of innovate start-up companies in the US, as Cory Doctorow claimed in a piece in Popular Science, can only be reveled with time, “what today’s decision will kill is American innovation. Chinese and European firms can get funding and ship products based on plans that aren’t fully thoughtcrime-compliant, while their American counterparts will need to convince everyone from their bankers to the courts that they’ve taken all imaginable measures to avoid inducing infringement.”
Supreme Court ruling (PDF)
MGM
Grokster
EFF
US scientists have created imaging technology that lets viewers enjoy what they claim to be the first truly three-dimensional holographic movies. 
Made by Texas Instruments, these clever puppies are currently used in television, video and movie projectors and incorporate a computer that processes an incoming digital signal several thousand times a second. 
If you look at interferograms on a PC screen, all you get is a series of random black dots creating an effect that looks a bit like a telly on the blink. 
T-Mobile USA today revealed that nearly half a million are currently signed up to access their hotspots with hourly, daily, monthly or yearly accounts 
Although many early Wi-Fi adopters were laptop-toting business suits connecting in airports, hotel rooms and lobbies, the demographic is now far broader, with students, music fans, backpackers, silver surfers and others hitting the hotspots with their PDAs, smartphones and laptops. 
New locations include the provision of roaming access throughout another 39 more airports in North America (making a total of 75 airports covered), with Wi-Fi guest room access being installed at 525 more hotels in the Marriott, Hilton, Ritz-Carlton, Doubletree and Renaissance chains. 
Sales of laptops outstripped the number of desktop PCs for the first time ever, according to Current Analysis. 
Once back-breaking beasts with a battery life measured in nano-seconds – and a price tag to make grown men weep – modern laptops are now faster, slimmer, more capable and, crucially, cheaper (laptop prices have fallen 17 per cent against a smaller 4 per cent fall for desktops). 
His barely-revelatory statement was backed up an announcement from Mike George, VP of consumer business for Dell US, who today revelaed that Dell will be launching a “luxury” range of computers, with their hoity-toity desktop and notebooks selling for between $1,200 (~£660, €979) and $3,500 (~£1,925, €2,855). 
The insatiable appetite of hungry surfers desperate for more information, analysis and intelligence has fuelled a database market growth of 10.3 percent in 2004, according to research released by the Gartner Group. 
Despite being a still a relatively small part of the overall RDBMS market, the Linux segment is as hot as an extra spicy vindaloo, registering 118 percent growth in 2004, more than doubling from US$300 million in 2003 to over US$650 million in 2004. 
Time Warner is considering “spinning off” its AOL division to help finance acquisitions in the future, said chief executive Richard D. Parsons on Friday. 
With Time Warner’s pockets already considerably lightened, transatlantic regulators then accused them of overstating advertising and subscriber numbers from mid-2000, with the company settling all charges with thumping great payments of US$510 million (~£279m ~€406.6m) in the States and US$300m (~£164~€239m) in the EU. 
AOL is now trying to find new revenue sources to compensate for the loss of U.S. subscribers to its dial-up Web access service, which has declined by 5 million users in three years, to 21.7 million. 
They’ve got a bit of a reputation for being a tad over-affirmative with their announcements, but Californian wireless solutions company Hop-on have revealed details of their new US$39 (~€31~£21.33) WiFi phone. 
Of course, the main attraction of this phone is the low, low price, with the company claiming that it “provides all the features and functionality of a VoIP terminal adapter but has the advantage of enabling users to talk from any available public or private WiFi access point. ” 
It’s an ugly looking beast all right, but we like the idea of cheap VoIP handsets, although hardened old cynics like us would suggest that you don’t hold your breath on this one, quite yet. 
After months of rumours on the Web, details of palmOne’s new LifeDrive PDA have finally shown up on Amazon. 
NormSoft’s Pocket Tunes is able to play MP3, WMA, Ogg Vorbis, and WAV files and the unit will also support full screen video and photo playback. 
The LifeDrive comes with USB 2.0, so transferring files onto the microdrive should be a fairly nifty business. 
Today, the US Court of Appeals for the DC Circuit ruled that the US FCC (Federal Communications Commission) does not have authority to prohibit companies from making computer and video hardware that doesn’t comply with the Broadcast Flag. This was to come into effect on 1 July, this year. 
We equated it to either a door being slammed, or it being politely pushed closed, but left ajar. It appear as if it’s the big slam. 
Purring like a cat recumbing in cream, Apple CFO Peter Oppenheimer revealed that Apple’s iPod shuffle has snaffled a 58 per cent share of the flash-based digital media market in the US. 
Positively glowing with confidence, Oppenheimer claimed that MP3 capability in handsets will be more complementary than a replacement, with handsets suffering from “a worse user interface and limited battery life,”