Regulators

US Supreme Court hearing internet file sharing case involving MGM, Grokster

MUMBAI: This is considered by some industry observers to be a historic occassion for the global media and entertainment industry. The US Supreme Court is hearing the MGM vs. Grokster case which is said to be the biggest media distribution case since the Sony Betamax (VCR) case of 1984.

The fight is over what liability technology companies like Grokster incur for the piracy by the users of their technology.

 

The case looks at the legal issues involved in peer-to-peer Internet file-sharing services. Media reports indicates that the verdict has broad implications for any technology that could potentially be used to infringe on copyrighted materials. So far, lower courts have ruled that the defendants in the case -- Grokster and StreamCast Networks -- can't be held responsible for what users do with their software, even if that includes illegally downloading copyrighted songs, films and software products.

According to MGM, over 90 per cent of the material exchanged using Grokster’s file-sharing software is copyrighted material and therefore, copyright infringement occurs every time users exchange the information. MGM contends that Grokster contributes to this infringement by making the file-sharing software available to the public.

US SC swaying towards Grokster? During a lively hour-long argument, the Supreme Court puzzled over the repercussions of granting the entertainment industry the authority to sue technology manufacturers over consumers who use their products to steal music and movies online. Justices wondered aloud whether lawsuits against manufacturers might have discouraged past inventions like copy machines and VCRs as well as newer innovations like iPod music players. All can be used to make illegal copies of films and songs.

Justice Antonin Scalia said that a ruling against Grokster which develop file-sharing software, could lead to a mentality that says," if I am a new inventor, I'm going to get sued right away."

 

 

During the hearing the entertainment industry's lawyer, Donald Verrilli Jr. said that his clients have no interest in suing inventors who take steps to block customers from stealing. However Grokster and other file-sharing services actively encourage consumers to steal. Verrilli called Grokster's software "a gigantic engine of infringement" that thieves use to steal 2.6 billion songs, movies and other digital files each month.

If the Supreme Court upholds the previous rulings, it would take an act of Congress to outlaw the current generation of file-swapping technologies. On the other hand, members of the broader technology industry are worried that a decision that goes against Grokster will undermine a previous Supreme Court decision they say created a legal climate in which technology innovation has been able to thrive for two decades.

Music companies say that they have tracked billion-dollar declines in compact disc sales since the emergence of Napster in the late 1990s. If file-swapping firms are allowed to continue doling out their software with impunity, the companies say they will have few ways to stop the emorrhaging, which they say will only get worse as Internet technology improves.

This case is part of a long drawn out battle being fought between the media industry and. new media distribution technology. Copyright vs. Innovation. It is a battle that has been fought over the phonograph, the photocopier, the tape deck, the VCR, and has now spread to peer-to-peer, technology. The challenge is to harmonise the goals of content ownership with those of technology innovation.

 

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