Highlights:
Supreme Court to Address File Sharing
European Software Patents
European Software Patents
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This is the March 3, 2005 Newsletter of the Colorado Bar Association’s Technology Law and Policy Section.
Supreme Court to Address File Sharing
On March 29, 2005 the United States Supreme Court will hear oral arguments in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. Many technology and intellectual property attorneys are calling this the most important case on the Supreme Court docket this year. The original case, filed in the United States District Court for the Central District of California, involved two groups of Plaintiffs – the “movie studio plaintiffs” (MGM, Disney, Columbia, Paramount, New Line, Time Warner, Fox and Universal), and the “record company plaintiffs” (including Arista, Atlantic, Rhino, Bad Boy, Capital, Elektra, LaFace, Motown, Sony and Virgin among others). The plaintiffs sued Grokster, StreamCast and Kazaa for copyright infringement based on the ability of the defendant’s file sharing software to enable users to swap copyrighted music, movies and other media in violation of the plaintiff’s copyrights. The plaintiffs did not allege that the defendants directly infringed the plaintiff’s copyrights, but rather that they were guilty of contributory and vicarious infringement.
According to the court, there are three elements necessary for contributory infringement of copyright:
1) there must be direct infringement by someone,
2) the defendant must have knowledge of the infringement, and
3) the defendant must have made a material contribution to the infringement, consisting of personal conduct that encourages or assists the infringement
Vicarious infringement arises when the defendant has a right and ability to supervise the infringing activity and has a direct financial interest in the infringing activity.
On April 25, 2003 the District Court granted the defendant’s motion for summary judgment. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029 (C.D. Cal. 2003)(http://news.findlaw.com/hdocs/docs/mgm/mgmgrokster42503ord.pdf). The court relied on the decisions in A & M Records, Inc. v. Napster, Inc., 239 F3d 1004 (9th Cir. 2001), and Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 104 S. Ct. 774 (1984), in holding that the defendant’s general knowledge of infringing use of their software does not rise to level of specific knowledge of infringing activity necessary for contributory infringement, nor does the design of the software or the activities of the defendants rise to the level of assisting infringement necessary for liablity. The District Court decision includes a good discussion of the elements of contributory and vicarious copyright infringement, and a plain language explanation of the difference between the original Napster software and the P2P file sharing software in use by Grokster, StreamCast and Kazaa.
On August 19, 2004 the 9th Circuit U.S. Court of Appeals affirmed the district court opinion (380 F. 3d 1154)( http://caselaw.lp.findlaw.com/data2/circs/9th/0355894p.pdf) and the Supreme Court granted cert last December. In February amicus briefs began cascading into the Supreme Court like rain in southern California. Supporters of the plaintiffs include the Business Software Alliance, Major League Baseball, the NBA, the NFL, the Christian Coalition of America, and, in an ironic twist of fate, Napster, LLC! Supporters of the defendants include Intel, the Computer and Communications Industry Association, the American Conservative Union and, interestingly, a group of musical artists including Steve Winwood, Heart, Chuck D, and Jason Mraz, arguing that file sharing is necessary for the distribution of music that is suppressed by the monopolistic recording labels and their associations.
The hyperbole of legal arguments and confluence of strange bedfellows provide additional appeal to this case, already of great interest to technology lawyers. Technology supporters decry the possibility of the Supreme Court overturning or narrowing its twenty year old decision in Sony Corp. of America v. Universal City Studios, Inc., which set the current standards for contributory and vicarious copyright liability, holding that Sony could not be liable for copyright infringement by users of its Betamax home television recording technology, which had substantial non-infringing uses, and Sony’s general knowledge of infringing uses did not reach the specific knowledge required for liability. The technologists believe the Sony decision paved the way for much of the technological progress and innovation over the last 20 years.
The plaintiff’s argue that the Sony case does not need to be overturned, and that the case now before the court is substantially different than Sony in that the P2P software provided by the defendant’s is designed for and depends upon infringing uses for its very existence, and has almost no legitimate application. In Sony the opposite was true – while Betamax could be used to infringe copyright by copying and selling media content, the vast majority of users recorded for their personal use.
While a sweeping repudiation of Sony by the Supreme Court could have a negative effect on future technological innovation, we look for the court to be very careful and precise in its opinion on this case, its first on digital copyright since enactment of the Digital Millenium Copyright Act.
European Software Patents
After extensive work in recent years, the European Union appeared ready to adopt the “Computer Implemented Inventions Directive”, which would have allowed patenting of computer software. Currently, the EU lags far behind the United States in the ability for authors of software to protect their work. However, under pressure from the Dutch parliament and the EU’s own legislative committee, Luxemborg, the EU’s current president, removed the directive from the agenda, which was the congressional equivalent of having a bill stuck in committee.
The Foundation for a Free Information Infrastructure, a socialist leaning organization supporting the development of public information goods based on free competition and open standards has been aggressively lobbying against the directive. It remains to be seen whether this development will hinder software development in the EU. For an interesting “the-sky-is-falling” view on software patents visit http://www.nosoftwarepatents.com/, and select the language of your choice.
Open Source Software
Boston hosted the LinuxWorld Conference in February, and open-source software advocates went public with their efforts to drastically reduce the number of open-source licenses. There are currently more than 50 open-source licenses approved by the Open Source Initiative (OSI), a non-profit group that certifies open source licenses. OSI officials are expressing concern about compatibility problems among so many licenses, requiring extensive legal review and intensive license management by companies seeking to develop new software utilizing open-source licenses.
Critics, however, believe that OSI and its mission to certify open-source licenses are obsolete. See, http://www.opensource.org/
This newsletter is available for viewing at any time on the CBA website. We are seeking contributions from CBA members for articles, news updates, practice tips, legal analyses and other comments. If you have something that you believe may be valuable or interesting to the section members, please call Brad Hamilton at (303) 573-1600 or send an e-mail message to bhamilton@joneskeller.com.
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