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Time for lawmakers to act on Grokster?

Maybe, maybe not. A panel of lawyers butts heads over whether regulating file-swapping services is best left to the courts.

WASHINGTON--Does Congress need to lay down new laws after last month's landmark Supreme Court decision on file swapping? Depends on whom you ask.

A spectrum of outlooks came from lawyers who squared off at a panel discussion hosted Tuesday by the Congressional Internet Caucus Advisory Committee.

The debate focused on the unanimous Supreme Court ruling last month that file-swapping companies that actively promote their products' copyright infringement capabilities (in legal terms, "active inducement") can be held liable for their users' illicit activities. The case now heads back to lower courts for another look.

Justice Stephen Breyer in his concurring opinion on the MGM v. Grokster case noted that "the legislative option remains available." But so far, members of Congress have applauded the court's unanimous opinion and indicated they plan to leave rule-making to the lower courts for now.

And that's the way it should be, said Don Verrilli, who argued the high court case on behalf of the entertainment industry.

"This is not the time for intervention by Congress," Verrilli said, because the Supreme Court set a "common sense standard" that gives the lower courts sufficient fodder to tackle illicit behavior. "I think (the) court has done a good job in striking the balance with the standard of inducement that it has set forth here."

Not so, countered Fred von Lohmann, a senior intellectual property attorney for the Electronic Frontier Foundation who represented StreamCast Networks in the suit. The Supreme Court left too many unanswered questions, von Lohmann said, adding, "I don't believe that uncertainty is balance."

"We need clear, bright-line rules so that technology companies can know in advance what they are and are not allowed to build," von Lohmann said.

He suggested two possible legislative routes: First, Congress should implement a "collective licensing" system for peer-to-peer file sharing, wherein users would pay a "reasonable fee," which would in turn be passed on to the copyright holders. Second, lawmakers should scrap the idea of statutory damages--that is, money awarded to copyright owners because of provisions in the law--but leave open the option of awarding actual damages and injunctions through the court action.

"We shouldn't have a remedial system where, if Microsoft or Apple or Slingbox bet wrong, they go out of business," von Lohmann said.

But he acknowledged that the legislative route would not be easy, as the "technology and content industries are still rather far apart" on the issues in question.

Patent lawyer Andrew Greenberg echoed those sentiments at the panel, saying, "The technology industry and the music industry have both been absolutely incapable of working together to articulate credibly, clearly and understandably what the rules of the road are."

As for legislation, Greenberg took a more moderate stance. Before deciding whether to take action, "Congress should monitor carefully" what the lower courts do, Greenberg said, adding, "I think it's time to wait and see."