The Grokster Decision - Ode to Thomas Jefferson (and David Boies)

The Grokster Decision - Ode to Thomas Jefferson (and David Boies)

By Pamela Jones
Groklaw

April 28, 2003

"If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation." -- Thomas Jefferson, in a letter [ http://216.239.53.100/search?q=cache:ap24EXYZtQMC:odur.let.rug.nl/%7Eusa/P/tj3/writings/brf/jefl220.htm+ideas+Jefferson&hl=en&ie=UTF-8 ] to Isaac McPherson, August 13, 1813.

That, in a nutshell, is what is happening to the music industry: a new idea was let loose into the world, and it can't be taken back.

"The moment it is divulged, it forces itself into the possession of every one," as Jefferson so eloquently put it. Once you divulge the idea, you can't control it or bottle it or make it stop spreading, except perhaps for a while with the barrel of a gun, and even then, it just goes underground, to resurface at a later time. Ideas have a life of their own, from the moment they are shared.

And the problem the music industry faces is: P2P is an idea.

Shawn Fanning had an idea for a more efficient way to share music using a distributed model over the internet, P2P. His idea wasn't quite fully formed, because Napster had a centralized server, where everyone had to plug in to reach everyone else. But his idea was simply that it would be efficient if everyone who had a file others might like made it available on his computer and vice versa.

Because the internet is nothing except a voluntary agreement to connect to other computers, he realized that this meant you could share whatever is on your computer with anyone in the world who was also connected to the internet, without having to get a domain name, a DNS server, an internet address, etc.

Here [ http://acij.uts.edu.au/pr2k/2001/rimmer.html ] is a description from an Australian school of law paper of how peer to peer was an improvement: "Before peer to peer, if you wanted to serve files from your PC you needed a permanent IP address, domain name, registration with DNS servers and properly configured web server software on the PC. With peer to peer technology your computer storage, cycles and content are made available because the PC via modem becomes a node that operates outside the DNS system, having significant autonomy from central servers with the ability to be accessed by other users. It is file sharing on the internet that occurs outside of the traditional forms of file transfer- http and ftp."

In short, it's cheaper and easier. Instead of a funnel, with a media outlet distributing through its narrow end, everyone on the internet could just share whatever they had with anyone, even just one individual, who wanted it.

It caught on because it works so well, not just because some used it in ways eventually defined as illegal. Instead of a company collecting what it thinks it can sell to a large enough group of consumers to be able to make a profit, the internet makes niche distribution easy and realistic.

If I want to hear Yma Sumac singing some esoteric Peruvian folk song, in meat space I am going to have a hard time finding her. But on the internet, she is easily found [ http://www.sunvirgin.com/ ]. And reading her bio there, you can't help but notice how copyright was used to reduce how much of her music is available: she made a CD herself in 1988, the bio says, after the height of her career was past, of her own music, but included a "remix" of some old material of hers without asking permission of EMI/Capitol Records, which promptly pulled the CD from the shelves for copyright infringement. That CD is just lost. It's hard to see how such a use of copyright benefited anyone, even EMI, which could have released the CD, taking its cut, but never bothered to do so. Surely the artist was harmed and so was the public, at least the part of the public that likes to listen to singers with a 5-octave range.

When Napster arrived, folks with esoteric taste in music thought they had died and gone to heaven. They weren't downloading music instead of buying it; they were downloading music they couldn't buy anywhere else. This was possible because people who had legitimately purchased esoteric music in their collections at home could share it over the internet from their homes. And a lot of people have odd, quirky collections that no huge chunk of people would pay for but some might like to hear once more, for old times' sake, like an old jingle from a TV ad from your childhood, or to win a parlor game, or whatever.

Of course, as we know, Napster was squished [ http://news.cnet.com/News/Pages/Special/Napster/napster_patel.html ] like [ http://216.239.53.100/search?q=cache:DX96r87-WnwC:lawschool.stanford.edu/faculty/radin/ecommerce/readings/copyright/napster.pdf+%22A+%26+M+Records,+Inc.+v.+Napster,+Inc.%22&hl=en&ie=UTF-8 ] a bug [ http://www.cybercrime.gov/napsterbr.htm ].

It's intriguingly true that searching today for David Boies' briefs in the Napster case is very much like looking for Yma Sumac records in meat space. When Napster went down, it took all the legal documents they had posted with it, so all the links to those documents no longer work. But you can still read what he wrote on the Wayback Internet Archive here [ http://web.archive.org/web/*/http://dl.napster.com/brief0818.pdf ] and here [ http://web.archive.org/web/*/http://dl.napster.com/brief0912.pdf ] .

Here [ http://www.wired.com/wired/archive/8.10/boies_pr.html ] is an article, an interview with Boies on the case, before the outcome was known.

But then along came more truly and thoroughly P2P software, like Grokster and Streamcast (Morpheus), which don't have a central server like Napster's. They provide the software and then the user finds others and shares with them according to their tastes and morals. As Judge Steven Wilson, the judge who stunned the music industry with his decision [ http://news.findlaw.com/hdocs/docs/mgm/mgmgrokster42503ord.pdf ] in the Grokster case pointed out, there are analogies, but there are also important differences:

"Although novel in important respects, both the Grokster and Morpheus platforms operate in a manner conceptually analogous to the Napster system described at length by the district court in A & M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896 (N.D. Cal. 2000)," he writes early in the decision. He quotes often from the Napster case.

In the Napster [ http://www.law.uh.edu/faculty/cjoyce/copyright/release10/AMRecords.html ] case, the Napster process was described like this:

"Although the parties dispute the precise nature of the service Napster provides, they agree that using Napster typically involves the following basic steps: After downloading MusicShare software from the Napster website, a user can access the Napster system from her computer. The MusicShare software interacts with Napster's server-side software when the user logs on, automatically connecting her to one of some 150 servers that Napster operates. The MusicShare software reads a list of names of MP3 files that the user has elected to make available. This list is then added to a directory and index, on the Napster server, of MP3 files that users who are logged-on wish to share. If the user wants to locate a song, she enters its name or the name of the recording artist on the search page of the MusicShare program and clicks the "Find It" button. The Napster software then searches the current directory and generates a list of files responsive to the search request. To download a desired file, the user highlights it on the list and clicks the "Get Selected Songs" button. The user may also view a list of files that exist on another user's hard drive and select a file from that list. When the requesting user clicks on the name of a file, the Napster server communicates with the requesting user's and host user's n2 MusicShare browser software to facilitate a connection between the two users and initiate the downloading of the file without any further action on either user's part."

Plaintiffs Metro-Goldwyn-Mayer Studios,Inc., et al., argued that Defendants (Grokster, Ltd., et al.) were liable for both contributory and vicarious copyright infringement and tried their best to paint them as another Napster.

With respect to contributory infringement, however, the judge said that to be guilty of that, you need to have knowledge of the infringement and you must have done something that encouraged or assisted the infringement:

"There are two factors that come into play in determining liability for contributory infringement: (1) knowledge, and (2) material contribution. The secondary infringer must now, or have reason to know of [the] direct infringement.... Furthermore, with regard to the second element, liability [for contributory infringement] exists if the defendant engages in personal conduct that encourages or assists the infringement. Napster, 239 F.3d at 1019 ..."

Refining it further, he added:

"Evidence of actual knowledge of specific acts of infringement is required for contributory infringement liability." In other words, it isn't enough to know in general that some folks are sharing infringing materials; you have to know that a specific individual is doing it at the time it is happening and then help him or assist him in his doing it.

Analogizing the Betamax case, the judge pointed out:

"In Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 104 S. Ct. 774 (1984), sale of video cassette recorders (VCRs) did not subject Sony to contributory copyright liability, even though Sony knew as a general matter that the machines could be used, and were being used, to infringe the plaintiffs' copyrighted works. Because video tape recorders were capable of both infringing and 'substantial noninfringing uses,' generic or 'constructive' knowledge of infringing activity was insufficient to warrant liability based on the mere retail of Sony's products. ... '[T]he sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement' if the product is 'capable of substantial noninfringing uses.' Id."

Then the judge said that this case, which was a Supreme Court decision, meaning it trumps everything from any lower court, applied to the Grokster case, because this particular P2P software is regularly used to distribute noninfringing materials.

"Here, it is undisputed that there are substantial noninfringing uses for Defendants's software, e.g., distributing movie trailers, free songs or other non-copyrighted works; using the software in countries where it is legal; or sharing the works of Shakespeare.... For instance, StreamCast has adduced evidence that the Morpheus program is regularly used to facilitate and search for public domain materials, government documents, media content for which distribution is authorized, media content as to which the rights owners do not object to distribution, and computer software for which distribution is permitted."

Again quoting from the Napster decision, the judge said that you can't be guilty of contributory infringement just because you made something that could used for an infringing use, unless you have specific information about particular infringing activity, which the defendants in this case lacked: "'A]bsent any specific information which identifies infringing activity, a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows for the exchange of copyrighted material.' Napster, 239 F.3d at 1021 (citing Sony, 464 U.S. at 436, 442-43)."

Napster got pinned to the wall, Judge Wilson said, because it had that knowledge, or more accurately, it could have it, and chose to avoid having it (and memorialized its decision in a memo) and failed to act when specific infringement was brought to its attention:

"With respect to Napster's 'actual knowledge' of infringement, the court cited: (1) a document authored by one of Napster's founders mentioning 'the need to remain ignorant of users' real names and IP addresses "since they are exchanging pirated music"; and (2) the fact that the Recording Industry Association of America notified Napster of more than 12,000 infringing files on its system, some of which were still available."

Plaintiffs had offered evidence that they had informed the defendants of specific infringing acts, but the problem was, according to the judge, to be guilty of contributory infringement, you must be able to stop the infringement and by the time the information came to defendants, it was too late for them to stop the infringement, because the way they are set up is different than the way Napster was set up:

"... Defendants correctly point out that in order to be liable under a theory of contributory infringement, they must have actual knowledge of infringement at a time when they can use that knowledge to stop the particular infringement. In other words, Plaintiffs' notices of infringing conduct are irrelevant if they arrive when Defendants do nothing to facilitate, and cannot do anything to stop, the alleged infringement."

Again quoting from the Napster case, the judge made a significant distinction between Napster and the Grokster defendants:

"In concluding that Napster materially contributed to the infringement, the Ninth Circuit relied on the district court's finding that 'without the support services defendant provides, Napster users could not find and download the music they want with the ease of which defendant boasts.' Napster, 239 F.3d at 1022 (quoting A &amp;amp; M Records, Inc. v. Napster , 114 F. Supp. 2d at 919-20).... Furthermore, the Ninth Circuit agreed with the district court that because Napster provided the 'site and facilities' for direct infringement, Napster materially contributed to the infringement."

The Napster court had followed the reasoning of Fonovisa, Inc. v. Cherry Auction, Inc. [ http://www.law.cornell.edu/copyright/cases/76_F3d_259.htm ] , 76 F.3d 259, which was a case involving a swap meet where vendors sold counterfeit goods. The defendant, who operated the swap meet, was found guilty because he provided "the site and facilities for known infringing activity". Napster was guilty for, in essence, providing the site and facilities for known infringing activity, and the Napster judge put it like this:

"Here, Napster, Inc. supplies the proprietary software, search engine, servers, and means of establishing a connection between users' computers."

Napster, by providing a server and a master list of available files "thus served as the axis of the file-sharing network's wheel. When Napster closed down, the Napster file-sharing network disappeared with it." Napster had "perfect knowledge and complete control over the infringing activity of its users."

The facts in Grokster are distinct, the judge said. Here the defendants could shut down and it would have absolutely no impact on the use of the already distributed software. "If either Defendant closed their doors and deactivated all computers within their control, users of their products could continue sharing files with little or no interruption."

The judge then clearly and accurately describes how P2P works today in Grokster and StreamCast, that there is no central server, no supernode owned and operated by the defendants, no information from users sent back to Grokster or StreamCast. Users download the software and then use various methods to find each other. He absolutely got the tech stuff, and he decided that without a central server, and absent any significant involvement of either company in infringing abuse, they were standing in Sony's shoes: they made a product that could be used in infringing and noninfringing ways and since they weren't directly involved after the software left their doors, they could not be found guilty of contributory infringement any more than Xerox could be held responsible for making machines that some people use to xerox more pages in a book than copyright fair use allows or even to make counterfeit money. Xerox didn't design their copier machines to counterfeit money and unless they were involved in the precise counterfeiting operation, they couldn't be held responsible for it.

So, the judge concluded, neither Grokster nor StreamCast was providing the "site and facilities" for direct infringement, because neither of them was involved in the actual search and share process. In fact, he wrote, "the record indicates that Defendants have undertaken efforts to avoid assisting users who seek to use their software for improper purposes."

While Plaintiffs had argued that by providing technical assistance the Defendants had an ongoing relationship with users of their software, the judge rejected that reasoning. To understand fully why he did so, read the remarkable amicus brief [ http://www.eff.org/IP/P2P/MGM_v_Grokster/20021127_CEA_amicus.pdf ] submitted by, of all surprising entities, the Consumer Electronics Association (CEA), which describes itself as "the principal U.S. trade association of the consumer electronics industry". Here's part of what they told the court:

"CEA's members design, manufacture, distribute, and sell a wide variety of consumer electronic equipment, including devices that may be misused for infringing purposes, but nonetheless are capable of substantial non- infringing uses. As a representative of manufacturers of digital technologies, CEA has consistently advocated protecting the rights of copyright holders in a manner that does not suffocate the introduction of new consumer innovations. This careful balance was established by the U.S. Supreme Court in Sony Corporation of America v. Universal City Studios, 464 U.S. 417 (1984) (hereinafter referred to as "Betamax"). CEA has long familiarity with the Betamax standard and the potentially devastating impact on consumers, the consumer electronics industry and innovative new technologies if this standard is misapplied or distorted. Since the time the Supreme Court announced its decision in Betamax, CEA's members and other technology companies have relied on those standards in having the freedom to design and market innovative products in the United States and the ability to use those products in a variety of applications. For this reason, CEA is very concerned that the Court not be guided by the flawed analysis of the Betamax decision offered by Plaintiffs in their Memorandum of Points and Authorities accompanying their Motion for Summary Judgment on Liability ("Motion") filed before this Court on September 9, 2002. Were the Court to adopt the analysis offered by Plaintiffs, it would establish a damaging precedent that could threaten other technologies that give individuals new control over the information they find, save and transmit over the Internet, discourage development of any new equipment or technology that may be capable of significant non-infringing use, and impose on manufacturers and providers of such technology unsustainable obligations to police the conduct of third parties."

What is all that saying, underneath the words? That the music industry isn't the only industry with a financial stake here. Just as makers of VCRs, not only the music makers, had a stake in whether or not consumers could tape movies off of the television set, and the competing interests had to be balanced, today, similarly, while the music industry wants to swat all P2P technology, there are numerous products that are involved in P2P, such as RIOs, iPods, disc burners, etc. These manufacturers have an interest in not shutting down all use of P2P technologies, no matter what the music industry says or desires.

Or, to use another analogy that they didn't argue, when cars were invented, it impacted negatively on buggy makers and blacksmiths and horse bridle makers, etc., but it opened up new business opportunities for car manufacturers and everything else cars made possible: travel, Motel 6s, sports car racing, etc. Making it illegal to manufacture cars would have made everyone in the buggy manufacturing business happy, but it would also have impacted negatively on other businesses based on the new technology, not to mention the public, who obviously preferred the new to the old method of getting around.

It's a remarkable document, the CEA amicus brief, if only because it was offered at all, and it appears to have influenced the judge in the Grokster case, because his arguments match those in that brief pretty closely.

Here's what the judge did NOT say: he didn't say it's ok for individuals to infringe the copyrights of others. This isn't a green light to download music the artists and/or the music companies aren't freely making available. In fact, it means pretty much the opposite: that if the music companies want to go after anyone, they will have to go after individual infringers, which they clearly have the appetite and the will to do. As one attorney, Eben Moglen, put it once, they are falling downstairs and hitting their heads on every stair.

Here [ http://www.eff.org/IP/P2P/Napster/20010309_p2p_exec_sum.html ] is advice to P2P companies from EFF in 2001, after the Napster ruling. The judge noted that Grokster and StreamCast might have designed their products very carefully and deliberately to end-run around the Napster ruling, and his suggestion was that maybe Congress can change the law if it wants to, but until it does, he felt bound by the Supreme Court's Betamax ruling, given the facts in this case.

The problem with that suggestion is: you can't kill ideas once they are released. People know now that P2P works better than CDs as a distribution mechanism. They have also realized that they can share other things besides music, like books and homework and pictures to grandma and the Bill of Rights. Even Cory Doctorow's Down and Out in the Magic Kingdom [ http://www.oreillynet.com/pub/a/policy/2003/02/24/perspectives.html ]. There's no changing or erasing that knowledge or the appetite for the better system. The only way to stop it now is with the barrel of a gun, so to speak. But when an industry can only stay in business if it threatens its customers and tells them that if they do what they are told, no one will get hurt, maybe it's an indication that the basic business plan is doomed.

I accepted the Napster decision as binding legally, at least until something overruled it. I'm a paralegal, and you don't choose this field unless you have a real love for the law. My own personal ethics also make it impossible to knowingly break any laws, at least any that don't violate a law of God. But I was never the same after I read David Boies' briefs in the Napster case, because I understood what he was saying, that P2P has changed the world and it can't go back to the old ways now that it's here.

I didn't think that the judges in that case ever really heard what Boies was saying, because the technology was too new for them to get it, and he had the additional problem of the way Napster was set up, and the reality that there just weren't a lot of noninfringing uses being made of Napster back then -- not because there couldn't be, but because it was just a new idea, a new technology. But once out there, what Boies wrote, his legal spin, his ideas, took on a life of their own, and when I read the Grokster decision, I realized the power that his ideas had, once shared, just as Jefferson wrote. He was ahead of his time. It took a while for everyone else to catch up, especially judges. And while the last chapter hasn't been written yet, one thing is clear: Jefferson was right.

Finally, here [ http://216.239.53.100/search?q=cache:3_F8Jk9b8LgC:www.hofstra.edu/Academics/Law/law_cyberlaw_donohue.cfm+Boies+%22A+%26+M+Records,+Inc.+v.+Napster,+Inc.%22&hl=en&ie=UTF-8 ] is a page that explains copyright law and its history, including Napster.