Monday, June 27. 2005
DRM-related Effects of the Grokster Ruling
It's an all-you-can-eat Grokster ruling news fest right now. Many traditional media venues, law and news blogs, and IP-related sites have minute-by-minute updates of responses to the case. I'm thankful that news of the decision didn't get completely buried under some of the other socially-sensitive rulings that were released today. I'm jumping in the fray to talk about potential DRM-related aspects of the case.
The Court ruled that Grokster could be held accountable for the illegal trading of files via its software and remanded the case to the 9th Circuit Court for a new ruling. The Supreme Court couldn't agree on how to use the previous 1984 Sony Betamax ruling (which the Movie Studios were hoping to have overturned or greatly limited by this ruling) so multiple concurring decisions were written by the Justices.
Most legal experts have stated that the Court didn't want to stifle further technological development; therefore the Justice Souter, who wrote the opinion of the Court, made a distinction between the technology and the business model of the company who created the technology. If the company explicitly targets their software as a method of breaking the law and profits from that illegal use (i.e. by increased traffic and advertising via the software), then the company is liable for that illegal use.
Although I haven't heard the words "digital rights management" yet, there was one part of the ruling that seems to encourage companies to use DRM in order to exonerate themselves from allegations of contributory infringement. The Court pointed out that Grokster designed and marketed Morpheus to specifically attract illegal file sharing. Moreover, it did nothing to filter illegal files or users who distributed or acquired illegal files through its software. From Justice Souter's Court Opinion,
Manually banning user accounts and illegal files is prohibitively time consuming. On all but the smallest of scales, it is not a feasible method for monitoring illegal activity on a network or software system. Thus, to protect a company from contributory infringement liability, the only remaining approach is to introduce some sort of DRM to limit illegal use. The wording in the Grokster decision may give content owners room to argue that companies whose products don't contain DRM are not doing enough to hinder or discourage infringement and are thus liable.
Author: Ginger Cox
The Court ruled that Grokster could be held accountable for the illegal trading of files via its software and remanded the case to the 9th Circuit Court for a new ruling. The Supreme Court couldn't agree on how to use the previous 1984 Sony Betamax ruling (which the Movie Studios were hoping to have overturned or greatly limited by this ruling) so multiple concurring decisions were written by the Justices.
Most legal experts have stated that the Court didn't want to stifle further technological development; therefore the Justice Souter, who wrote the opinion of the Court, made a distinction between the technology and the business model of the company who created the technology. If the company explicitly targets their software as a method of breaking the law and profits from that illegal use (i.e. by increased traffic and advertising via the software), then the company is liable for that illegal use.
Although I haven't heard the words "digital rights management" yet, there was one part of the ruling that seems to encourage companies to use DRM in order to exonerate themselves from allegations of contributory infringement. The Court pointed out that Grokster designed and marketed Morpheus to specifically attract illegal file sharing. Moreover, it did nothing to filter illegal files or users who distributed or acquired illegal files through its software. From Justice Souter's Court Opinion,
Finally, there is no evidence that either company made an effort to filter copyrighted material from users’ downloads or otherwise impede the sharing of copyrighted files. Although Grokster appears to have sent e-mails warning users about infringing content when it received threatening notice from the copyright holders, it never blocked anyone from continuing to use its software to share copyrighted files. Id., at 75–76. StreamCast not only rejected another company’s offer of help to monitor infringement, id., at 928–929, but blocked the Internet Protocol addresses of entities it believed were trying to engage in such monitoring on its networks, id., at 917–-922.Although the main component of this proof was that Grokster intended Morpheus for illegal file sharing, the addition of this evidence means that companies may be held liable if they don't actively try to discourage the infringing behavior. Apparently making users aware that such activity is illegal is not enough. Companies whose products can be used illegally must take action to remove either the users, the illegal content, or the mechanisms that make that illegal activity possible. Souter didn't mention the technology specifically, however, such language in the ruling can potentially give digital rights management more legal legitimacy.
Manually banning user accounts and illegal files is prohibitively time consuming. On all but the smallest of scales, it is not a feasible method for monitoring illegal activity on a network or software system. Thus, to protect a company from contributory infringement liability, the only remaining approach is to introduce some sort of DRM to limit illegal use. The wording in the Grokster decision may give content owners room to argue that companies whose products don't contain DRM are not doing enough to hinder or discourage infringement and are thus liable.
Author: Ginger Cox
Comments
Curious, holding the manufacturer liable for the use of its products. Might not this argument be used for other technology-related crime, such as handgun violence?
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