Supreme Court mulls file-swap 'pushers'

Middle-ground ruling in P2P case could focus on companies that actively encouraged copyright infringement.

As the Supreme Court mulls the fate of file-swapping networks, justices are studying a rarely used element of copyright law that sparked bitter controversy when raised in Congress last year.

Last week, the nation's top court heard arguments from the entertainment industry and file-swapping software companies in a landmark review of the legal status of peer-to-peer networks. In the course of that hearing, several of the justices appeared interested in finding a middle ground that would focus on companies that actively encouraged, or "induced," copyright infringement.

A similar idea was at the core of last year's debate over the "Induce Act," a U.S. Senate bill sponsored by the record labels and staunchly opposed by much of the technology world. Applying this concept to file-swapping companies would be an unusual twist in copyright law, but the idea has been backed by some influential groups, including the Institute of Electrical and Electronics Engineers, or IEEE.

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What's new:
As the Supreme Court ponders the fate of peer-to-peer networks, justices appear interested in finding a middle ground that would focus on companies that actively encouraged copyright infringement.

Bottom line:
Applying this concept to file-swapping companies would be an unusual twist in copyright law, and would mean another long round of litigation for Grokster and StreamCast.

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"It would allow the legal test to focus on your own behavior, over which you have complete control, rather than on the action of third parties," said Annette Hurst, a San Francisco copyright attorney who has been following the Grokster case.

The Grokster case remains one of the most closely watched technology court cases in recent history, with the entertainment and technology industries each contending that an unfavorable outcome could devastate their ability to operate.

The Supreme Court is reviewing two separate lower court decisions that said file-swapping software companies Grokster and StreamCast Networks should not be held legally responsible for the copyright infringement that takes place on their networks.

The hearings last week allayed some fears on both sides. The judges appeared unwilling to let new peer-to-peer companies use "unlawful expropriation of property as a kind of start-up capital," as Justice Anthony Kennedy said. Entertainment companies said that showed the court had little sympathy for file-swapping software companies.

But justices were clearly sensitive to the computer industry's concerns that technology itself could trigger lawsuits, even when companies develop products with legal uses in mind. That fear appeared to lead several to seek a middle ground focusing on companies' behavior, rather than the technology itself.

"Given that there are conceptually excellent uses of this technology...does actual inducement take care of (the problem)?" Justice Stephen Breyer asked the government's attorney, who was arguing on behalf of the entertainment companies.

Middle ground or lawsuit heaven?
The inducement idea hinted at by the court could open new vistas in copyright law, drawing a line for acceptable behavior in the

 

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