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Title: High Court Hears P2P Appeal
WarXchild Says

WASHINGTON -- The Supreme Court prodded and probed but rarely showed its hand today in the long-running legal battle between content owners and technology developers.

In questions from the bench, the justices pushed the entertainment industry throughout the morning about its copyright lawsuits stifling innovation while seriously questioning the business models of P2P companies such as Grokster and Morpheus.

Justice Stephen Breyer mused that under the standards being sought by Hollywood, Gutenberg and the inventors of copy machines could be held liable for massive infringement.

Justice Anthony Kennedy suggested to Grokster attorney Richard Taranto that the P2P companies are using stolen copyright material "as a kind of start-up capital. From an economic standpoint and a legal standpoint, that sounds wrong."

In MGM vs. Grokster, Hollywood hopes to extend copyright infringement liability to software developers who create products allowing individuals to violate copyright laws. Hollywood contends that more than 90 percent of all material traded on the file-swapping networks is copyrighted.

Two federal courts have already ruled in favor of the P2P companies, deciding that the software also has non-infringing uses.

"That gives them [P2Ps] a free pass as long as they can speculate that there are other uses [of their software]," MGM attorney Donald Verrilli told the justices. "They are intentionally building an infringing network." 

Verrilli also noted that in the Sony Betamax case, the 1984 landmark Supreme Court decision that Hollywood hopes to overturn in MGM v Grokster, Sony was able to prove "substantial" non-infringing uses of its video recording machines.

Justice Antonin Scalia pressed Verrilli on just where Hollywood draws the line on infringement.

"How much time do you give me to show lawful uses?" Scalia asked. "I?m a new inventor, I need to know right away."

Verrilli said it all depended on the business model being developed by the inventor.

"These companies already operate in the shadows," he said. "They are using our copyrighted material as seed capital. The legitimate use of this software is a tiny little fraction."

Grokster?s Taranto contended that illegal distribution of copyrighted material is permitted under the Sony decision as long as non-infringing uses can be proven. This prompted a number of questions from the justices about the "previous bad acts" of the P2Ps.

"Isn?t it odd that Napster goes one way and these others go another way?" Justice Ruth Ginsburg asked.

In the Napster case, the movie and music studios were able to shut down the operations of the first P2P network because Napster depended on a central server to index the material available to its members. Grokster and other P2Ps have refined the software to eliminate central servers.

Checked by: WarXchild Times Read: 371 Comments: 0 Date Posted: 2005-03-30 00:53:39GMT 

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