Though the Supreme Court's Grokster decision left the status of file-sharing software up in the air, it made this clear: File swappers are criminals, no different than pirate DVD hawkers at the swap meet. But does the entertainment industry really have clean hands in all of this?
PopMatters Film and TV Columns Editor
Isn't it amazing how quickly the anti-file-sharing hype machine geared up after the Supreme Court issued its latest "blow" against piracy -- specifically the June 27 decision on Metro-Goldwyn-Mayer Studios Inc., Et Al., Petitioners v. Grokster, Ltd. et al. No sooner had the ink dried on Justice Souter's opinion (with Ginsburg, Rehnquist and Kennedy weighing in with a concurrent view) that Hollywood was sounding the death knell for all technology based on copyright infringement. From the sound of these sentiments, you'd swear the efforts of the RIAA and the MPAA had made illegal downloading a digital dino on the edge of extinction.
But such responses are premature. MGM and its litigious buddies did not win the case, they merely succeeded on appeal. To the layman, that distinction may seem minor, but to those involved in the ongoing litigation, the difference is tremendous. The issue at hand was not whether Grokster and StreamCast Networks were guilty of infringement, nor was the nation's highest court being asked to decide whether file swapping was legal. Instead, thanks to its limited scope of jurisdiction, the justices had to determine if the granting of a summary judgment in favor of the defendants (Grokster, et al.) was correct as a matter of law. Doesn't quite sound like the final nail in the downloading coffin now, does it?
The basic premise of the case is fairly simple. Grokster and StreamCast were sued by MGM (who was later joined by others) for copyright infringement. You know the drill -- the studio found out that you could download its latest DVD releases (and, in some cases, films still in theaters) via a simple software program. It accused Grokster and the rest of them of violating their intellectual-property rights. During the pretrial discovery phase, MGM put forth that Grokster and company were actively aiding and abetting the illegal downloads, going so far as to position themselves as the "next Napster". And how did these parties to piracy defend themselves? They didn't.
Well, they kinda sorta did. They admitted that their software was used primarily for the illegal swapping of copyrighted material. Even as memos and corporate strategies were uncovered, all of which pointed to Grokster's desire to be the new leader in such controversial activities, the companies simply sat back and basically said, "Yep, we did that." And still, when the time came to rule on a motion of summary judgment (verdict without trial), the trial court held in favor of the defendants. On appeal, the Ninth District Court of Appeals agreed. Both relied on Supreme Court precedent to decide the issue as a matter of law without going into the factual merits of the claims. Basically, the lower courts believed MGM had no grounds to sue.
But the Supreme Court was not persuaded. In order to understand why, you have to look at the Sony v. Universal, the landmark case both the trial court and DCA used to make its ruling, and something, surprisingly, the Supreme Court justices also relied upon to reach their decision. A few decades ago, when a little thing called the VCR was the latest technological advance set to tear apart the entertainment industry, Universal sued Sony over possible copyright infringement. But Sony prevailed, and the high court set a precedent in deciding such cases. Sony showed that its invention could do more than just pirate videos. The high court agreed, citing that a significant benefit to this technology was the ability for consumers to manage time and manipulate various offerings to satisfy their entertainment needs. Under Sony, individuals with inventions that threatened copyright could simply show a legitimate use and a lack of intent to violate and be done with it. In the Grokster case, the lower courts ruled that Sony v. Universal applied to file-sharing applications as well as VCRs.
But they were wrong. Both the trial court and the DCA misapplied the Sony case. Souter makes it very clear in his lead opinion that Sony set up a series of tests, benchmarks that Grokster and StreamCast had to meet before they were entitled to the protection of that case. When investigated, the defendants failed to meet every single one: Sonyafforded a technology protection only if it shows a "substantial" non-copyright infringement use. The Grok gang argued that people use their software for "applications" other than getting a copy of Beck's latest release. But MGM's survey showed that the ratio between legal and illegal uses weighed 9 to 1 in favor of feloniousness. Oops.
Next, the Supreme Court ruled in Sony that a tech provider must also prove that they did not have the intent to violate copyright. It all comes down to one key word -- inducement, a basic legal principle referring the act of luring individuals into doing something that they normally wouldn't want or have the capacity to participate in. Even if the 90-percent-illegal stat wasn't the rodent up Souter's robe, the evidence of Grokster's encouragement, enticement and inaction was overwhelming. It proved conclusively that Grokster and StreamCast were in the business of file sharing for the sake of supporting individual efforts to illegally download copyrighted material. Heck, the companies even conceded this at the trial-court level. Faced with such massive evidence and the violation of the standard set in Sony, the Court had no choice but to rule in favor of MGM. And all that meant was that the case was sent back down for an actual trial on the issues.
Certainly, the Supreme Court believes that Grokster and StreamCast were actively in the business of bolstering piracy. And when you read the opinion, this message comes out strong and clear: Violation of copyright will not be tolerated, especially via technology designed almost exclusively to abet it. But the Court also agreed that in essence, the defendants are guilty by association. The true bandits are the millions of computer owners. It is they who actually do the infringing, leaving companies like these to take the blame -- that is, as long as the companies are actively advocate it.
Far from ending file sharing, the Supreme Court has given future Groksters the blueprint to finally make it the VCR of the 21st century. All a computer company has to do is manufacture a word-processing program that also supports person-to-person trading, offer filtering technology with each software bundle and send out a weekly newsletter stating that copyright infringement is bad, and according to a basic reading of both Sony and Grokster they will have done nothing wrong.
Thus file downloading remains in its moral morass, a horribly hot-button gray area. The arguments condemning file sharing are clear, substantive and based wholly on the legality of the issues, not to mention the sheer amount of piracy. File sharing opponents point to the violation of existing law (which copyright is, after all), the loss of money to both acts and their corporate sponsors, and the culture of crime and entitlement that the new technology breeds. In essence, the PC is raising a new generation of brats who believe in the open and unrestricted access to any and all media that they want.
File swapping is a technically advanced version of '70s bootlegging and '80s tape trading, but the clarity and completeness of the copying gives today's overeager fan a digital duplicate of the original. Unless you weep over a lack of cover art, you walk away with the same thing, sonically, as the person who buys it. This important difference is what drives the entertainment industry's current complaints. Home taping may have given immediate access to the latest releases, but back in 1981, you still had to buy the record to actually own and hear the 'real' thing.
Of course, file swapping is piracy. Certainly when an individual buys a CD, loads it on his hard drive and burns dozens of copies for friends, family and flea-market patrons, the impact and intent are immediate and obvious. Similarly, a college student who manages to fill two 80-GB drives with every album he or she has ever wanted without buying a single hard copy is proving their penchant against proprietary interest. So yes: Individuals who make a copy of a DVD for themselves, upload that file to a folder and share it with the world are as contemptible as the person who smuggles a camera into a cinema to make a hastily created copy of a major marquee release for the street corner. Yet the debate becomes a little more ambiguous when you focus on casual infringement -- the person who downloads a favorite song that the radio no longer plays or the individual who rejoices when she locates an album no longer available commercially.
While each of these less severe scenarios still violate the law, it's interesting to note how the entertainment industry manages to keep its hands clean. Because when you take a good look, its money-stained mitts are just as dirty as the individuals doing the infringing. Maybe if the record companies tried to show how they didn't have a stranglehold on airplay and how they didn't control play lists and consultants, the poor sap finding that favorite tune would seem more sinister. Perhaps if they proved that they valued their product as something more than cash-cow chattel, there wouldn't be so many open-walleted music fans scanning the web for out-of-print releases.
Indeed, the war on piracy is a lot like the war of drugs. As with most efforts to enforce policy, small timers are targeted while the 'bosses' continue their widespread abuses. The RIAA feels no shame in pinpointing high school kids and college students for arrest and litigation. The rationale for picking on the 'user' is obvious -- it's supposed to act as a deterrent, allow for easier control of criminality and dry up the marketplace for future feloniousness. Beside, nothing plays better for the cameras -- and the cause -- than seeing remorseful youngsters weeping when the lawman comes to call. While the truly criminal enterprises crank out the knock-offs in locales and logistics outside the purview of those in power, little Johnny and Janey are being carted off to the big house because of their insatiable need for more Avril songs.
As with the war on drugs, a provision of a known enemy is carte blanche for state corruption. Just as the state needs drug cartels to validate their budgets and bully tactics, the entertainment and recording industries actually need piracy. The existence of small-time, pirates helps justify its strong-arm tactics, its unfair talent contracts and monopoly-like hold over the media. Without pirates, the industry would have to justify the unjustifiable, like its retail pricing. If you or I can make a copy of a CD for less than a $1, why does it cost $18 once its hits the stores?
The problem is obviously not the technology, or the high prices paid to talent. For most musicians do notmake their money off albums and singles. A record company pays artists only a fraction of the net profit and only after the cost of recording, advertising and overhead are accounted for. Most acts earn their keep on the road, or in licensing their songs to other sources (like soundtracks). Unless they can manage some type of longevity in the business, a musician never gets rich off his record deal. Only the record company does.
Back when tape trading was seen as the murderous menace to all things music, new artists could start up labels, put out their 45s, and often find places that would play them. They didn't typically attain instant popularity, but they did have an outlet. Today, even with technology further eroding the barrier between recording and release, an untried musician has very limited access to acceptance. The same companies who will not sign them also own the radio stations and the retail outlets, have the elite video deals with MTV and Fuse, fuel the so-called legitimate music press with previews and exclusivity, thereby guarantee that your immaculately produced CD of sensational songs will languish in the local bin of your town's last independent music store -- assuming there is one.
If file swapping ever became the legitimate means of music distribution (meaning, fully funded and financed to make sure all artists had access and were paid their due) the old corporate concept of the music industry would have to change immeasurably. Certainly, radio and video would still control pop culture, but entrée and ease of use would bolster competition and content. If an individual could preview an album and learn in advance if it was any good, he would gain newfound leverage over record companies. The people would determine the best way to spend their cash and shop around for other sonic samples that best fit their propensity and purchasing power. Just as the music industry will have to justify its pricing and A&R decisions, the film studios will also have to answer some unpleasant questions, like why a stupid, sophomoric comedy costs $60 million to make? Or why certain DVD releases are saddled with less than definitive picture and presentation? And what about region coding?
Like it or not, file swapping is the first wave of what should be an eventual revolution in the entertainment industry. As its currently organized, the entertainment industry tries to dictate what you'll want, make it cheaply, charge exorbitant prices for it, and then spend some of the massive resources the conglomerates' monopoly status provides them to get you to swallow it. According to the multinationals' accountants, people should not even want to decide what music to listen to or to preview a film before plunking down their hard-earned cash to see it. No, they should listen to the ad agencies they pay for, the videos they make, the songs they decide are singles and the scripts they believe have value. But with a legal entertainment marketplace modeled after file-sharing distribution networks, all that would change. Able to circumvent the entertainment industry's stranglehold on distribution, customers can at last begin to demand accountability for the culture produced for them.