Pam Samuelson: "Did MGM Really Win the Grokster Case?"

(Full disclosure: Pam is my adviser)

Via the RSS feed of Pam Samuelson's Papers page comes her forthcoming (Oct. 2005) article for CACM's Legally Speaking column: "Did MGM Really Win the Grokster Case?". Here's the take-away and a comment:

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MGM didn’t really want to win Grokster on an active inducement theory. It has been so wary of this theory that it didn’t actively pursue the theory in the lower courts. What MGM really wanted in Grokster was for the Supreme Court to overturn or radically reinterpret the Sony decision and eliminate the safe harbor for technologies capable of SNIUs. MGM thought that the Supreme Court would be so shocked by the exceptionally large volume of unauthorized up- and downloading of copyrighted sound recordings and movies with the aid of p2p technologies, and so outraged by Grokster’s advertising revenues—which rise as the volume of infringing uses goes up—that it would abandon the Sony safe harbor in favor of one of the much stricter rules MGM proposed to the Court. These stricter rules would have given MGM and other copyright industry groups much greater leverage in challenging disruptive technologies, such as p2p software. Viewed in this light, MGM actually lost the case for which it was fighting. The copyright industry’s legal toolkit to challenge developers of p2p file-sharing technologies is only marginally greater now than before the Supreme Court decided the case.

And she also disagrees with those of us who have been painting the loss as a future chilling effect upon innovation:

Larry Lessig, among others, has suggested that the Court’s decision will have a chilling effect on innovation. I respectfully disagree. The Grokster decision borrowed from the patent law the active inducement liability concept just as in 1984 the Court in Sony borrowed the safe harbor for technologies with substantial non-infringing uses. Technology developers who induce copyright infringement should not expect to be treated any differently than those who induce patent infringement.

As long as the courts apply high standards for inducement liability—requiring proof of overt acts of inducement, underlying acts of infringement, and a specific intent to induce infringement—there should be ample room for innovative technologies to continue to thrive. Engineers will need to watch what they say during the development process, and firms will need to think carefully about how they should go about building markets for their products and services. But shouldn’t they be exercising such care even without the Court’s guidance about inducement liability?

As I've already expressed to her privately, I don't fully agree with this... especially as it applies to open source collaboration.

Of course, open source design and development takes place largely in publicly-accessible forums so all deliberation etc. is available to everyone. Many projects have developers from all over the world as contributors who are bound by different law. This makes for a curious environment... where developers will have to use non-recordable communication channels (like Off-the-Record) for candid design deliberation and establish content guidelines for public forums that are archived. Further, if you do have a history of loose lips, how do you start anew as a company? It would seem that a company would have to completely divorce their current business from past business.