Peer-To-Peer News - The Week In Review - July 2nd, ’05

[JackSpratts]

In CONGRESS, July 4, 1776

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. --That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, -- That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. --Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain [George III] is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.



He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.

He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil power.

He has combined with others to subject us to a jurisdiction foreign to our constitution and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For Quartering large bodies of armed troops among us:

For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us, in many cases, of the benefits of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by the Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.


Signed,


New Hampshire: Josiah Bartlett, William Whipple, Matthew Thornton

Massachusetts: John Hancock, Samual Adams, John Adams, Robert Treat Paine, Elbridge Gerry

Rhode Island: Stephen Hopkins, William Ellery

Connecticut: Roger Sherman, Samuel Huntington, William Williams, Oliver Wolcott

New York: William Floyd, Philip Livingston, Francis Lewis, Lewis Morris

New Jersey: Richard Stockton, John Witherspoon, Francis Hopkinson, John Hart, Abraham Clark

Pennsylvania: Robert Morris, Benjamin Rush, Benjamin Franklin, John Morton, George Clymer, James Smith, George Taylor, James Wilson, George Ross

Delaware: Caesar Rodney, George Read, Thomas McKean

Maryland: Samuel Chase, William Paca, Thomas Stone, Charles Carroll of Carrollton

Virginia: George Wythe, Richard Henry Lee, Thomas Jefferson, Benjamin Harrison, Thomas Nelson, Jr., Francis Lightfoot Lee, Carter Braxton

North Carolina: William Hooper, Joseph Hewes, John Penn

South Carolina: Edward Rutledge, Thomas Heyward, Jr., Thomas Lynch, Jr., Arthur Middleton

Georgia: Button Gwinnett, Lyman Hall, George Walton




















"It is so ordered." - Justice Souter


"What does it mean to induce someone to copyright infringement? If you think about it, any company would be liable. I think this is going to hammer the technology industry going forward." - Charles Baker


"I really think with all due respect, Fred, that that's fear mongering. It's not hard to see the commonsense difference between running a legitimate business where you tell people when they buy your product, don't steal music and running a business like Grokster and Streamcast where they help you find top 40 hits." - Don Verrilli, Content counsel


"Well, frankly, I wish I could rely on Mr. Verrilli's assurance that my concerns are just fear mongering. We've seen the entertainment industry sue every new technology for a century: starting with the player piano, the VCR, the first MP3 player, Replay TV, PVR's.

These are companies that are perfectly legitimate, not bad actors, as Mr. Verrilli suggests, and in an environment where entertainment companies have this track record of suing a whole variety of technology companies for making technologies they disapprove of, I think it's more than just fear mongering." – Fred Von Lohmann, Technology counsel


"If we can really make this work there will be enough electricity to last the world for the next 1,000 to 2,000 years." – Ian Fells


"I'm confident that after we see all the financial records from New Line and Warner Brothers that we're trying to get to, every dollar in [the LOTR] dispute will become four dollars." - Peter Nelson


"People read the words 'Supreme Court' and they think it's the bottom of the ninth, but this is clearly only the second inning." - Eric Garland


















Ignorance Is Power

The relative gulf between here and there, us and them, got a lot wider this week when the Supreme Court in a profoundly ill-advised decision unsupportable even by its own Byzantine logic or lack thereof found in favor of corporate giants and simultaneously created an entirely new class of law. When the court sent the MGM vs. Grokster case back to the lower courts the so-called Induce Act, battered about but never delivered by the senatorial Pawns of Big Media was ushered into life at 10:00 AM Monday morning in a sterile Washington DC stone edifice.

Measuring an anxiety provoking 55 pgs this mongrelized mish-mash of ill-conceived convolutions owes its sorry existence to nine dottering theorists who resembling many love struck parents were if not quite certain on what, specifically, the decision was based, were unanimous in their opinions that its hideous features were in fact things of beauty.

Thanks to this court, not only is the light at the end of the tunnel dimmer but the tunnel itself has gotten longer. It just goes to show that baby making is a job best left to those younger and more vital.

About the only thing the little gargoyle has going for it is it didn’t kill Sony. But that’s not exactly what it seems either, because by the courts own admission Grokster/Streamcast met the Sony challenge in full – something already recognized by the lower courts – but using a snoot full of pique in place of a head full of logic they overruled them anyway. Said the court, “We do not revisit Sony further, as MGM requests…It is enough to note that the Ninth Circuit's judgment rested on an erroneous understanding of Sony and to leave further consideration of the Sony rule for a day when that may be required.” Like when Grokster wins again in the lower courts.

But Sony itself was based on a 90%/10% ratio of alleged infringing to non-infringing use, that is, something like nine percent of the uses people put their VCRs to - at the time – were authorized. As it turns out that’s exactly the same ratio found among Grokster users, and this wasn’t overlooked. It was deliberately ignored. It’s one thing to miss it entirely, it’s another to stare at it head on then and dismiss it, but that’s exactly what happened. A point even a justice remarked on with concern.

Justice Breyer in a clarifying opinion identified that important ratio, he wrote “When measured against Sony's underlying evidence and analysis, the evidence now before us shows that Grokster passes Sony's test--that is, whether the company's product is capable of substantial or commercially significant noninfringing uses. Id., at 442. For one thing, petitioners' (hereinafter MGM) own expert declared that 75% of current files available on Grokster are infringing and 15% are ‘likely infringing.’ See App. 436-439, 6-17 (Decl. of Dr. Ingram Olkin); cf. ante, at 4 (opinion of the Court). That leaves some number of files near 10% that apparently are noninfringing, a figure very similar to the 9% or so of authorized time-shifting uses of the VCR that the Court faced in Sony.” Furthermore Breyer wasn’t taken in by doomsday scenarios put forth by content extremists claiming unauthorized file-sharing would destroy the media companies and the artists in their service. “The extent to which related production has actually and resultingly declined remains uncertain, though there is good reason to believe that the decline, if any, is not substantial,” observed Breyer correctly. But in a deeply disappointing twist typical of the present generational battles over Internet policy he doesn’t seem to have tried to educate the other eight Justices of the importance of his facts nor even base his own decision on the fundamental evidence he knows to be true. Instead he ignored it himself, and voted with the majority.

This is a case of nine clueless people who, as the oft-repeated saying goes, just don’t get it. There is little question that had the Court been composed of people young enough to actually feel comfortable with the Internet the outcome would be one we’d be celebrating this week instead of grieving. We are in the grips of a worldwide Geezer vs. Geek conflict, a centralized vs. decentralized vision of the future that is as dispiriting as it is predictable. Pulled in opposite directions we are as equally ruled technologically by the youthful Decentralists as we are politically by the ignorant and aged but iron fisted Centralists.

But you know, time waits for no one and the old farts aren’t getting any younger. People do get tired. They quit. They drop dead. They may be writing their briefs in their Depends. TBH after a good five years of this I figured a new crop of subversives would be infiltrating the corridors of power with their WASTE keys, secret geek handshakes and all. I was ready for a little relief. Instead the tension just keeps getting stronger. On Monday I was agitated enough by the Supreme Court’s iniquitous decision I prescribed myself a 7 GB download of 100 CDs just to steady my nerves. Bittorrent obliged the next day and I must admit I felt much better, which brings up another issue. One of the things in the original Sony case was the movie moguls contention that recording a TV show was in and of itself illegal, you know, the old “The VCR is to the American film producer and the American public as the Boston Strangler is to the woman home alone” thing to quote from the worst Hollywood huckster of off the wall hyperbole Jack Valenti. That even if the Betamax was good for other things bedsides the infringing ones (that 91 %), one couldn’t count time-shifting among them, because that was a violation too. Well, as it happens TV had been around awhile and even the Geezers had plenty of comfy tube time under their belts, some twenty-five years worth, so it’s no coincidence that concurrent with the Sony decision they also ruled copying TV shows for later viewing was legal too, and that made Sony so much easier to decide. I mean if you suddenly snap your fingers and decree the overwhelming majority of uses a consumer will throw at some controversial new gizmo are legal, it’s going to be an easy walk to home to decide the device itself is non-infringing. Would that it was so easy with file-sharing but if anything, it’s gotten worse in that regard.

Perhaps because the seventies were a special time of individual promise, perhaps because the present Justices are as old in spirit as they are in age or perhaps because of some specific animosity towards a brazen new technology that doesn’t evolve the art but completely reconstructs it - in the most democratic and people-centric way in history - we heard no pronouncements that the non-profit sharing of files was OK to do by the people, you know, the actual ones who support this entire edifice of art, commerce, culture and society. As a matter of fact Breyer himself griped it was “common theft.” Please. Of all people he should know better. It’s insightfully weird because when a Real Pirate was busted for making and selling recordings the court lectured the prosecutor that no, selling wasn’t “theft”, it was “infringement.” Apparently they draw the line at just plain listening. If you expect any mercy from these fossils whose boney butts barely keep the bench warm you’ll have to do this for the money baby. Limiting yourself to the pleasure of time-shifting tunes now seems to be their idea of a national disgrace. Maybe they’re just disappointed by the lack of criminal ambition. Or just cranky in general. A younger jurist would have seen it differently.

The real problems occur when technologists sit down with venture capitalists and work out the funding for their next killer apps. The VC guys may decide all this ass covering is too distracting for their partners and move their brain trusts to some safe haven overseas, allowing America’s competitors to utilize her technological brilliance while exploiting her political short comings. That would be a real shame and it remains the likeliest threat of this dangerous and myopic decision from a court that barely deserves to be called Supreme.

Strangest of all is the effect this will have on file-sharing, regardless of how the lower courts dispose of the case when it finally reaches them, because it won’t have any at all. A few apps will close, the centrally serviced ones mostly, but people will keep sharing files, people will keep improving the art and people will keep doing basically what they’ve been doing for the last five years, and why not? We’re not bemoaning the immorality of violating natural laws here - there are none against copying - we’re talking about the people’s own laws, and how a string of bad decisions by officials acting in their own narrow self-interest have forced the people to interpret those laws themselves. This may shock the drama queens in congress and the windbags on the courts, but I don’t think they’re going to be around all that much longer anyway, so like a lot of ephemera associated with the Internet their agitation will be as short-lived as their careers.

Finally I couldn’t help noticing the courts referral to “common law.” It came up a half dozen times in Souter’s decision and it invariably comes up in IP cases to buttress shaky arguments when the law itself is murky. It purports to describe how some ancient group or another worked stuff out back in near prehistory, a sort of “they did it then, so it’s ok now” defense. Whether that has much relevance to today’s highly factionalized societies in the grips of sweeping cultural and technological changes is open to debate, but more often than not the common law cited is left deliberately vague and stretched unrecognizably thin to fit the argument of whatever lawyer is abusing it. But it is highly respected by the courts all the same, as is the recognition that the common behaviors of people carries bona fide authority. Well let me say something about common law. We’re making it right now and it’s no courtroom conceit. When 100 million people are copying and sharing files on a daily basis it’s as strong an example of true common law as you’re ever going to see. Stick that in your brief you geezers.
















Enjoy,

Jack















July 2nd, 2005




Justices Reinstate Suits on Internet File Sharing
Linda Greenhouse and Lorne Manly

The Supreme Court handed a major victory to the entertainment and recording industries on Monday by reinstating a copyright-infringement suit against two file-sharing services.

In a unanimous opinion, the court strongly suggested that the services, Grokster and StreamCast Networks, should be found liable for the vast copyright infringement committed by those using their software to download music and movies.

Two lower federal courts in California had ruled in favor of the two companies, dismissing the lawsuit without a trial on the basis of a legal analysis that the Supreme Court found seriously flawed.

In his opinion for the court on Monday, Justice David H. Souter suggested that when properly evaluated, the evidence against Grokster and StreamCast was, in fact, so strong that the entertainment-industry plaintiffs might be entitled to summary judgment.

At the least, he said, MGM Studios and the other plaintiffs - including the Recording Industry Association of America, the Motion Picture Association of America and a class of 27,000 music publishers and songwriters - were entitled to a trial to prove their accusations that the file-sharing companies were in business primarily to enable and induce computer users to find and download copyrighted material.

In the Supreme Court's view, the plaintiffs have effectively made that case already. Justice Souter called the record "replete with evidence" that the companies "acted with a purpose to cause copyright violations by use of software suitable for illegal use." The opinion referred to "evidence of infringement on a gigantic scale" and said that "the probable scope of copyright infringement is staggering." [Excerpts, Page C5.]

The movie and music industries, even armed with a decision affirming their legal recourse, have a long way to go to capitalize on it, and they plan new efforts to persuade or force those actually doing the downloading to desist.

Digital rights advocates, while somewhat relieved that the court did not go further, were concerned that the ruling could invite a deluge of lawsuits and a risk that they would inhibit innovation.

There is no dispute that individual users violate copyright law when they share files of copyrighted material, and the industry has had some modest success in seeking fines from college students and others. But with millions of users downloading billions of files each month, retail prosecution proved inefficient, so the music and entertainment industries turned their attention several years ago to the commercial services that make the file sharing possible.

That effort led to the Supreme Court's most important copyright case since its ruling in 1984 that shielded the manufacturers of the videocassette recorder from copyright liability for possibly infringing use by home consumers.

The court based its decision then, in Sony v. Universal City Studios, on a finding that the VCR was "capable of substantial noninfringing uses," like time-shifting, in which home users simply recorded programs for viewing later.

In ruling last year for Grokster and StreamCast, the United States Court of Appeals for the Ninth Circuit in San Francisco relied on the Sony decision, finding that the file- sharing software had possible noninfringing uses. Because the software operates in a decentralized way without using a central computer, the appeals court found, Grokster and StreamCast could not track users and had no direct knowledge of any specific instance of infringement.

The Supreme Court on Monday held that the appeals court had misapplied the Sony decision by focusing only on the technology, without regard to the business model that the technology served.

"One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties," Justice Souter wrote.

Movie and music industry executives hailed the decision. "If you build a business that aids and abets theft, you will be held accountable," said Dan Glickman, chief executive of the Motion Picture Association of America, the lobbying organization for the major Hollywood studios. BMI, representing more than 300,000 songwriters and composers, called the decision "good news indeed for the creative community whose work has been blatantly infringed."

The movie and music industries had warned that file sharing was hurting them financially, and could ultimately inhibit the creation of content. The music industry has blamed song-swapping over the Internet for its decade-long sales slump.

While movies and television shows are more difficult to trade online because of the size of their files, technological advances are making that easier and threatening the rich source of cash that DVD sales have become for the studios.

On the other hand, groups including the American Civil Liberties Union, Consumers Union, the Consumer Electronics Association and other elements of the computer and technology industries warned the court that too broad a rule of contributory copyright infringement would stifle innovation if there was a possibility that consumers might put a product to an infringing use.

It was clear from the opinion, Metro-Goldwyn-Mayer Studios Inv. v. Grokster Ltd., No. 04-480, that the justices had taken note of that argument and tried to draw a line that would protect both copyright holders and innovators. The court identified the line as "inducement" - deliberately urging consumers to make illicit use of the product or showing them how it could be done.

"Mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability," Justice Souter said. He added: "Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise."

James Gibson, a professor of intellectual property and computer law at the University of Richmond School of Law, applauded what he called a balancing act between artistic creators and technological innovators.

By putting so much weight on proving companies' bad behavior, he said, the decision could create more legal expenses and unpredictability for technology companies. At the same time, he added, it should provide peace of mind to creators of technology that could be used for both legitimate and infringing uses.

But several technology advocates expressed concern, saying innovators would now be saddled with the befuddling notion of "intent." Matthew Neco, StreamCast's general counsel, said the ruling turned Hollywood and the recording industry into "thought police."

Michael Petricone, vice president for technology policy at the Consumer Electronics Association, said that without clear guidelines from the court on what a company must do to avoid being held liable for contributing to copyright infringement, "the legal clarity has decreased and the risk of litigation has increased."

Attorney General Alberto R. Gonzales said he was pleased the court had "determined that those who intentionally induce or encourage the theft of copyrighted music, movies, software or other protected works may be held liable for their actions." The Bush administration joined the argument in support of the studios.

While the court's judgment was unanimous, the justices did not share the same view of how useful the Sony precedent remained after more than 20 years of changing technology. A concurring opinion by Justice Ruth Bader Ginsburg, which Chief Justice William H. Rehnquist and Justice Anthony M. Kennedy joined, suggested that the Sony case's reference to "substantial noninfringing use" was too easily misunderstood by lower courts and might have to be tailored for different types of technology.

The file-sharing software might be used to swap large numbers of noninfringing files, Justice Ginsburg said, but even a big number would be "dwarfed by the huge total volume of files shared."

Justice Stephen G. Breyer, in a concurring opinion also signed by Justices John Paul Stevens and Sandra Day O'Connor, said the Sony decision had basically achieved its "innovation-protecting objective" and struck the right balance between protecting copyrights and technology. It should be retained, he said.

Linda Greenhouse reported from Washington for this article and Lorne Manly from New York. Jeff Leeds and Tom Zeller Jr. contributed reporting.
http://www.nytimes.com/2005/06/28/te...HWhmhgmFWv4V3Q






Day Of Decisions
PBS NewsHour

GWEN IFILL: Another one that was perhaps not as close a call as one would have thought, Grokster, which is most -- grownups don't know what Grokster is. But teenagers understand this is how you share and video and music files on the Internet or using the Internet. And the court ruled in favor of the entertainment industry?

JAN CRAWFORD GREENBURG: Yes. This was a big victory for the entertainment industry, which has long argued that file sharing services like Grokster and Streamcast, the other company at the center of t his litigation, have cost them, you know, billions of dollars because people steal their songs and movies, instead of having to go out and buy it, by using these file-sharing services.

They had sued Grokster and Streamcast; a lower court sided with the software companies. It said that they could not be held liable. But today the Supreme Court in a unanimous decision set that ruling aside and said, in fact, that Grokster and Streamcast could, in fact, be held liable. And they sent the issue back down to the lower courts for a trial on whether or not there should be liability.

This was a big win for the entertainment industry, which contends that this issue has cost it untold amounts of money. And the court today in its opinion recognized that the violations here, that the copyright violations that people have done have been staggering. The issue here and why this was also such a significant case was that the industry is trying to hold Grokster and Streamcast liable for copyright infringement for the actions of third parties, the teenager sitting at home or the college student in their dorm, who download - use their software to download these files - which violates copyright.

The companies argued that they had done nothing wrong. They weren't violating copyright; they weren't even -- they didn't have any centralized server and that there were many other legitimate uses for their product.

GWEN IFILL: But this wasn't even close. When was the last time you saw a unanimous court decision?

JAN CRAWFORD GREENBURG: Well, on the last day of the term, you don't see them often because the last day of the term and as things progress, those are always the most controversial, contentious decisions, the ones that so bitterly divide the court, the ones that have all the dissenting opinions and the concurring opinions.

For example, in the Ten Commandments case that we just talked about, those two cases produced ten separate opinions from the Justices. So you don't often see it on the last day. And of course the court will not have - this isn't the last word -- this goes back now to the lower courts to decide if these companies will be liable.

GWEN IFILL: And it was the last day, but we may still be hearing more from the court -

JAN CRAWFORD GREENBURG: That's right.

GWEN IFILL: So we'll be keeping our ear to the ground. Thanks a lot, Jan.

JAN CRAWFORD GREENBURG: You're welcome.

GWEN IFILL: For more on the battle between Hollywood and the technology companies, we turn to Terence Smith.

TERENCE SMITH: Joining us to discuss the implications of today's decision in the MGM- Grokster case is Fred Von Lohmann, co-counsel for Streamcast Networks, a co-defendant with Grokster, and Don Verrilli, counsel to both the Motion Picture Association of America and the Recording Industry Association of America.
Welcome to you both.

Don Verrilli, as Jan was just making the point, this unanimous decision, tell us in favor of your clients, tell us what your fundamental argument was.

DON VERRILLI: Well, there are three critical points that we took to the court and the court accepted all the three of them and accepted them unanimously.

The first one is this: That the downloading of songs and movies from services like Grokster, and Morpheus, Streamcast, Kazaa is illegal and wrong, plain and simple.

Justice (Stephen) Breyer, in his concurring opinion, described it as garden variety theft. That's really important because as these industries have shown, there's really a devastating impact here from the billions and billions of unlawful downloads that occur every month. The royalties for songwriters are drying up. There's been thousands of layoffs in the record industry and the motion picture industry and recording companies are forced to slash their roster of artists because their revenues have taken such a hit from this. So it's really important message from the court on that question that this is unlawful activity.

The second important point is what the court said is that if you go out and build a business based on promoting that unlawful activity, then you are going to be on the hook. You are going to be responsible for the unlawful actions and the harms that your promoting activity cause.

TERENCE SMITH: Promoting being the key word.

DON VERRILLI: Promoting being the key word. And that's the key reason why the court held and held unanimously that companies like Grokster and Streamcast can be on the hook for the activity of the users who use that software.

And the third point that's critical is that what the court did here was accept our call for balance. The right answer in the law here is one that achieves a balance, protecting the rights of copyright owners and providing real, effective protection and providing real breathing space for legitimate innovation.

And what the court said is if you are out there running a legitimate business like the Apple iPod and iTunes business, you have nothing to worry about. But if you are out there building a business based on the promotion of infringement, then you are on hook for the consequences of your actions.

TERENCE SMITH: Fred von Lohmann, what's your reaction to this decision?

FRED VON LOHMANN: Well, as you might imagine, I have a slightly different view than Mr. Verrilli does. I think what the Supreme Court has done here is really open a new era of uncertainty for not just companies involved in peer-to-peer file sharing but, in fact, for all of America's technology industries.

So all of the parties went to the Supreme Court asking the court to clarify the existing doctrines around copyright law, which addressed a central question: When will a technology company be held responsible for what its end users, what the customers, what the person sitting in the dorm room, to use the earlier phrase, might be up to?

Now, that's obviously not important just to the file sharing companies; it's also important to people that make CD burners, personal computers, people who provide broadband Internet service. All of these technology companies depend on a clear answer to that question.

Unfortunately, the Supreme Court really declined to give us a clear answer. Instead of clarifying the existing law, they instead created a new form of liability, the so-called "inducement liability," as you pointed out, premised on a notion of promoting infringement.

In that, we think the Supreme Court really missed a crucial opportunity here. In the wake of this ruling, I think peer-to-peer file sharing will continue unabated. There are obviously hundreds of millions of people around the world who are using file sharing applications.

I don't think this ruling is going to magically change that. What it is going to do is make America's technology companies have to look over their shoulder and ask: well, what is this new promotion liability?

If I say the wrong thing in a marketing meeting or if a company like Apple, for example, says rip, mix, burn in its ad campaign as it did a few years ago, will that be the kind of thing that gives rise to liability? Or will I have to redesign my product, which is something that was always a serious threat for the technology industry here.

So the Supreme Court frankly, I think, has opened more questions than they've answered today.

TERENCE SMITH: All right. Don Verrilli, what about Fred von Lohmann's point that peer-to- peer sharing of files is not going to go away and it is universally spread, or so widely spread, that as function it is not going to go away. How does the industry deal with that?

DON VERRILLI: You know, I think that - you know, it may not go away entirely, but I think this is an important step to changing the dynamic from this sphere from the unlawful, illegal downloading where you take without paying the artists, and the creators there do, and shifting to a legal model of downloading where you get on iTunes, you pay the modest price to get what you want in a lawful legitimate way, so I guess I disagree with that.

I think that this is going to be a really important moment to move the center of gravity from the unlawful activity to the lawful activity and the court has sent a powerful signal that it is unlawful here, but if you build a lawful business model over here, you are going to be just fine.

That's what we want. That's what my clients are aiming to do. We think that there's enormous potential in the digital area for efficient, positive, user-friendly distribution of songs and movies, but in a lawful way that respects copyrights.

And we think that we're going to migrate from the unlawful universe to a lawful universe. Will we squelch this entirely? No, but I think we'll make a major migration in the right direction.

TERENCE SMITH: Fred von Lohmann, what happens now with your case? Do you have to go back to the lower courts and argue particularly this point about whether or not you promoted - or your clients, rather, promoted an illegal use?

FRED VON LOHMANN: That's right. That's at least part of what we'll have to address.
Unfortunately, there are other theories of liability that are still at issue in the case. So, for example, Mr. Verrilli's clients have argued from the beginning that my client - the maker of Morpheus, the maker of Grokster - they should be held responsible based on a so-called "contributory infringement" theory, which is really sort of an aiding and abetting kind of theory.

And, unfortunately, the Supreme Court today has told us nothing about how the court is going have to deem with that claim. There's also another claim that Mr. Verrilli's clients have made from the beginning that there should be liability because this software could have been designed differently in a manner that would have satisfied the entertainment industries more than the way it was in fact designed.

So the district court will have to look at all these theories and frankly isn't going to have very much guidance in the Supreme Court ruling regarding the two other theories I mentioned or, for that matter, a clear road map even as to this new theory of inducement.

Now, the court has really left a lot of questions open, and I predict not just in this case, but in other cases, lawyers will have to go through expensive litigation before we have the clear line that I mentioned at the beginning our technology industry needs so that they can understand: what can they build; when do they have to spend money on lawyers; when can they spend money on engineers?

DON VERRILLI: Can I just make a -- say a word about that? I really think with all due respect, Fred, that that's fear mongering. It's not hard to see the commonsense difference between running a legitimate business where you tell people when they buy your product, don't steal music and running a business like Grokster and Streamcast where they help you find top 40 hits.

And the court was drawing a commonsense distinction. That's been in the law for a century as Justice (David) Souter recognized in his opinion. So I really think that the uncertainty that you're talking about is really an overblown fear; it's not a concern at all.

TERENCE SMITH: Okay. Just a final word quickly if you will, Fred von Lohmann.

FRED VON LOHMANN: Well, frankly, I wish I could rely on Mr. Verrilli's assurance that my concerns are just fear mongering. We've seen the entertainment industry sue every new technology for a century: starting with the player piano, the VCR, the first MP3 player, Replay TV, PVR's.

These are companies that are perfectly legitimate, not bad actors, as Mr. Verrilli suggests, and in an environment where entertainment companies have this track record of suing a whole variety of technology companies for making technologies they disapprove of, I think it's more than just fear mongering.

TERENCE SMITH: Okay. Thank you both. Obviously it's going to be argued further in the lower courts. But thank you both very much.
http://www.pbs.org/newshour/bb/law/j...ions_6-27.html






A Supreme Chill For P2P Technology?
Roy Mark

What will a post-Grokster world look like? Very rosy indeed, a jubilant Hollywood says. A new era of legal headaches that will stifle innovation, peer- to-peer (P2P) supporters moan.

In Monday's Supreme Court decision in MGM v. Grokster, the justices put P2P companies on notice that they can he held responsible for the illegal acts of their file- sharing end users.

Content providers say it's about time that companies that encourage illegal sharing of copyrighted works be held accountable.

The unanimous decision stressed that the issue was not about technology, but bad behavior. The justices noted both Grokster and StreamCast actively promoted their software as an alternative to the original Napster, the P2P bad boy forced into bankruptcy over the same copyright infringement issues.

"Grokster and StreamCast's efforts to supply services to former Napster users, deprived of a mechanism to copy and distribute what were overwhelmingly infringing files, indicate a principal, if not exclusive, intent on the part of each company to bring about infringement," Justice David Souter wrote in the court opinion.

The opinion added, "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," Souter wrote. "Each company showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users."

In other words, the court said Grokster and StreamCast are inducing users to commit copyright infringement.

"What does it mean to induce someone to copyright infringement?" asked Charles Baker, attorney for Porter & Hedges, which represented StreamCast in the case. "If you think about it, any company would be liable. I think this is going to hammer the technology industry going forward."

Ed Black, the CEO of the Computer and Communications Industry Association, called the decision "dangerous for technology and innovation while Fred von Lohmann of the Electronic Frontier Foundation predicted the court action would "unleash a new era of legal uncertainty for technology developers."

In Hollywood, though, music and movie publishers said the decision was straightforward.

"The court spoke to the culture as well as the law: thou shalt not steal," said Mitch Bainwol, head of the Recording Industry Association of America (RIAA). "The legitimate marketplace has a real shot to take off now. We've had a tough few years, but now the law is fair."

Jim DeLong of the Progress and Freedom Foundation, which submitted an amicus brief in support of Hollywood, said he saw "no way that this decision will impede technology and innovation."

DeLong added, "If not getting a free ride is inhibiting, then, yes, technology may have a problem."

Michael Weiss, CEO of StreamCast, said the decision is "certainly another legal hurdle for our company, but the David versus Goliath battle will continue."

Weiss and Grokster may have good reason to be worried.

"There is substantial evidence in MGM's favor on all elements of inducement," The court opinion states. MGM is expected to return a district court and seek a summary judgment against Grokster and StreamCast.

Not everyone supporting Grokster, however, was bemoaning the decision.

"Today's Court decision underscores a principle Public Knowledge has long promoted: punish infringers, not technology," Gigi Sohn, president of the public advocacy group said. "What this means is, to the extent that providers of P2P technology do not intentionally encourage infringement, they are exempt from secondary liability under our copyright law."

Sohn was also encouraged the court upheld the legal principle it established in the 1984 Sony Betamax case.

"The Court is clearly aware that any technology-based rule would have chilled technological innovation," she said. "That is why their decision re-emphasized and preserved the core principle of Sony v. Universal City Studios -- that technology alone can't be the basis of copyright liability -- and focused clearly and unambiguously on whether defendants engaged in intentional acts of encouraging infringement."
http://siliconvalley.internet.com/ne...le.php/3516021






MPAA copyright victory is 'website killer'

Motion Picture Association of America DMCA Ruling Opens Pandora's Box
Robert Jaques

The US Supreme Court has declined to hear the case of InternetMovies.com (Rossi) vs. Motion Picture Association of America (MPAA), a move which InternetMovies.com warns will set the stage for a continued subjective interpretation of the 'good faith' provision in the Digital Millennium Copyright Act (DMCA).

"This decision threatens website owners and sets the standard for unrelenting shut downs prompted [by] copyright holders [alleging] copyright violations without reasonable investigation," warned Michael Jay Rossi, president of InternetMovies.com.

The ruling concerns a case originally filed in 2002 when the MPAA shut down InternetMovies.com for allegedly offering copyrighted materials for illegal download.

The MPAA issued a cease-and-desist letter to the site's host service claiming that Lord of the Rings: Return of the King was available for download. The host was forced to shut down InternetMovies.com under the provisions of the DMCA.

The MPAA claimed that it had behaved in good faith and swore under oath that the 2003 release of Lord of the Rings: Return of the King was made available for download in 2001. Rossi denied that the film had been available on the site.

"All I was doing was reporting news about movies online. This now proves that there are no freedom of speech or due process rights on the internet for the common person," said Rossi.

"The MPAA did not dispute that it had made an error in judging the site's content. The District Court, Ninth Circuit Court and Supreme Court have all sided with the subjective interpretation of the DMCA and ruled in favour of the MPAA."

According to Rossi, the ruling will allow copyright holders to continue to abuse website owners with a 'shoot now, ask later' legal attack based on the good faith belief in the DMCA.

"This opens a Pandora's box of troubles for website owners and individuals. I am very sad to see that American rights have been an illusion all this time. The DMCA is meant to serve our constitutional rights," he said.

"I can only hope that copyright holders do not abuse this DMCA super-power, but as you can see they already do. Look for the book downloadable soon: 'In Hollywood we trust, no liberty or justice for all.'"
http://www.vnunet.com/vnunet/news/21...website-killer






Sharing Culture Likely to Pause but Not Wither
Tom Zeller Jr.

Will the legal defeat of two file-sharing companies change anything?

The Supreme Court's ruling against Grokster and StreamCast Networks yesterday created serious concern among advocates of file-sharing technology, along with some sighs of relief that the decision left room for future technological innovations.

"The Supreme Court decision will unleash a new era of uncertainty," said Fred von Lohmann, an intellectual property lawyer with the Electronic Frontier Foundation, a digital rights advocacy group. Mr. Von Lohmann successfully argued the software companies' case before the United States Court of Appeals for the Ninth Circuit last year.

"America's entire innovation sector is now facing a new era of copyright uncertainty," he said, adding that the decision "created a new theory of liability that will tie up the courts for a long time."

In overturning lower court decisions that had favored the two peer-to-peer software makers, the court ruled that "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties."

But the court provided little guidance on just how one might determine whether a company was purposely inducing its users to violate the law, and in this, many technology advocates saw reason for concern. The entertainment industry, they argue, can now use the ruling to sue without restraint, seeking to show bad "intent" or "purpose" behind every technology it does not like.

Still, some file-sharing advocates did see hope in the court's preservation of what has come to be known as the Sony doctrine - a 1984 Supreme Court decision in Sony Corporation of America v. Universal City Studios that has provided an umbrella of protection for technology innovators from claims of contributing to copyright infringement.

Gigi B. Sohn, the director of Public Knowledge, a public interest advocacy group focusing on intellectual property, said there was cause for optimism because the court "reaffirmed the core position of the Sony Betamax case," and that peer- to-peer technology can be used for noninfringing uses.

She also said that the drive for potentially stifling legislation on peer-to-peer technology - something the entertainment industry has pursued in Congress, including last year's failed Induce Act - has been rendered unnecessary.

Given this decision, "there's nothing that Hollywood should want or need from Congress," Ms. Sohn said.

Indeed, the decision did seem to indicate that peer-to-peer technology - and by extrapolation, whatever unknown innovations are to arise out of the minds of new generations of tinkerers - was not liable for copyright infringement simply because it might be used that way.

"A purpose to cause and profit from third-party acts of copyright infringement," the court said, would have to be demonstrated in order to hold a company responsible for the illegal ways its software is used.

"I think there's plenty more to be written on this," said Jonathan Zittrain, co-director of the Berkman Center for Internet and Society at Harvard Law School and the co- author of an amicus brief filed with the Supreme Court in support of Grokster. "And I think Sony emerges not in tatters," he said.

Even so, the decision's emphasis on finding the "intent" of a company could mire new technologies in a litigious limbo. Every e-mail message, every conversation, every cocktail napkin on which an entrepreneur scribbles a vision for a new technology, Grokster supporters said, could become evidence in a future lawsuit, making unfettered blue-sky innovation a risky business without lawyers vetting every move.

"If you're making a new piece of software with all kinds of cool Swiss Army-knife uses, and even if your motives are pure as the driven snow, you'll be given pause" by this decision, Mr. Zittrain said. "But there are a lot of tinkerers who don't follow Supreme Court decisions" and presumably will not be burdened with concerns and will keep on tinkering.

Mark Gorton, the chief executive of the Lime Group, a brokerage firm that makes LimeWire, a file-sharing alternative to Grokster, said he was likely to stop distributing LimeWire in reaction to the ruling. He said it appeared too difficult to meet the implied standard for inducement.

"Some people are saying that as long as I don't actively induce infringement, I'm O.K.," he said. "I don't think it will work out that way."

The court, Mr. Gorton said, has "handed a tool to judges that they can declare inducement whenever they want to."

The potential implications of the decision were not lost on young users of file-sharing programs.

"The record companies are spending Grokster and Morpheus into submission, so they won't be able to keep fighting the case," said Rick Hendrickson, 22, a student at Fitchburg State College in Massachusetts who said he avidly used Morpheus, StreamCast's file-sharing software, and operates a weekly radio blogcast called P2P Revolution.

"It might make people think twice," he said, about making the next peer-to-peer applications.

And the argument that the recording industry was actually hurting itself by suing file-sharing companies continued to be a familiar refrain yesterday.

Before Napster, the original file-sharing service, went dark in 2001, Brian Anderson, 33, a network administrator in Salt Lake City, downloaded an album by a British artist called Badly Drawn Boy. "I wanted to hear his music after reading an article about him," Mr. Anderson said, "so I burned a few copies for myself and my friends and ended up loving it."

Since then, Mr. Anderson said, he has purchased three of the artist's albums, as have many friends who first heard of Badly Drawn Boy through him. "Because I illegally downloaded his album for free," Mr. Anderson said, "he and his label ended up making hundreds of dollars from me and my friends."

According to Eric Garland, the chief executive of Big Champagne, a company that tracks peer-to-peer network use, the question of whether file-sharing has been a boon or a bust for the entertainment industry is irrelevant.

File-sharing technology is endlessly mutable, he said, and its users are a migratory species. From Napster, which used central servers to index the files its users stored on their computers, file-sharing enthusiasts turned to upstarts like Kazaa, Grokster and StreamCast, which had no central indexes. And in a world where innovations and programming wisdom can be shared across oceans and borders, there are always new options emerging, so it was never likely that users would stick with advertising- supported software anyway.

"Would anyone among the tens of millions of people in this country who use file-sharing tools to share copyrighted works - would anyone miss the businesses?" Mr. Garland said. "The banner ads, the bundled third-party software, the subscription offers, the paid upgrades?"

The answer, he said, is no.

Distributing file-sharing software has been profitable because the providers often installed other software programs on the computers of each user. The makers of pop-up advertising software and other programs paid as much as $1 each time their software was installed.

Still, industry experts say that the total revenue of most of the file-sharing companies can be measured in a few million dollars a year. Kazaa, once the largest file-sharing company, may have taken in tens of millions of dollars a year at its peak. But this revenue was dwarfed by the recording industry's spending on lawsuits and other antipiracy measures.

But even if the Grokster decision ultimately makes it difficult for companies to turn a profit as distributors of file-sharing software, that would not solve Hollywood's problems, Mr. Garland said.

"Businesses have never been responsible for innovation in the peer-to-peer file-sharing space," he said. "Businesses came as an afterthought. Shawn Fanning created the tools that made Napster possible, and the business just grew around the imagination of that teenager."

And with open source software continually evolving, it is not likely that even the shutting down of Grokster and StreamCast would eliminate peer-to-peer networks.

"People read the words 'Supreme Court' and they think it's the bottom of the ninth, but this is clearly only the second inning," Mr. Garland said. "We are continuing down a winding path here, and more questions have been asked than answered."

Roben Farzad and Saul Hansell contributed reporting for this article.
http://www.nytimes.com/2005/06/28/te...gy/28peer.html






DCIA Addresses Supreme Court Decision in MGM v. Grokster Case
Press Release

DCIA Addresses Supreme Court Decision in MGM v. Grokster Case

The Distributed Computing Industry Association (www.dcia.info), which focuses on peer-to-peer (P2P) file sharing and last week celebrated the milestone of recruiting fifty (50) Members in less than two years, responded to today’s US Supreme Court ruling in the MGM v. Grokster case by committing to redouble its efforts to foster the industry’s commercial development.

“The DCIA welcomes the Court’s refusal to rework the Betamax decision, and is optimistic that the grounds for secondary liability that it announced today will prove to be fair and workable. As the case works it way back through the lower courts, we anticipate clarification of the rules of engagement between content providers and technology suppliers in the digital realm generally, and with respect to peer-to-peer (P2P) file sharing in particular. We are confident that today’s decision in the MGM v. Grokster case will ultimately lead to the continued expansion of our industry,” said DCIA CEO Marty Lafferty in making the announcement.

“We urge all affected parties to focus now on deploying new business models for content distribution that are non-infringing and expand the marketplace for digital content, and not to pursue legislative intervention, which would only be counter-productive. The private sector, with added clarity that will result from such lower court outcomes, should manage the process from here,” he added.

“This ruling provides impetus for the P2P distribution channel to grow and flourish. P2P digital rights management (DRM) technologies and micro-payment services have been proven with computer games, software, and independent music and films. Major labels and studios can avail themselves of these tools to develop marketplace solutions – starting today.”

“We hope the Court’s decision will lead to a shift away from conflict and toward commerce, and we encourage everyone to come to the table and develop new business partnerships. The MPAA and RIAA and their powerful members control 90% of popular entertainment content distribution and can now move forward to license responsible P2P companies using this highly efficient and extremely popular channel for the distribution of their copyrighted works to create new markets and revenue opportunities. P2P file-sharing technologies are part of the larger movement to an increasingly distributed computing environment. As the Court affirmed, this kind of technological progress is inevitable – embracing it to harness its capabilities will prove to be much more gainful than resisting or trying to stop it,” Lafferty concluded.
http://press.namct.com/content/view/2022/9/






Supreme Court Sows Uncertainty

Let's measure today's opinion against the chief issues mentioned in the "Grokster Reader's Guide" last week.

· It's Not About P2P: It's still not about P2P. Whether or not today's ruling unleashes new litigation against innovators, it will have no effect on the tens of millions of Americans who continue to use P2P file-sharing software, nor will it deter off-shore programmers living beyond the reach of US copyright laws. Hilary Rosen is right: giving music fans a compelling legitimate alternative, whether through collective licensing or simply competing with free, is the only solution.

· No Matter What, We've Won: There is reason to celebrate in today's ruling. It could have been much worse. As many have noted, the Court rejected many of the more extreme positions that the entertainment industry argued for in the courts below. As discussed below, the Court left intact several important legal bulwarks for innovators. While the Court didn't shore them up, it also didn't tear them down.

· Main Event #1: Sony Betamax. The Supreme Court left the Betamax defense intact by essentially refusing to say anything about it, although the sniping between the two concurrences suggests that a future battle may be coming. Neither side can declare total victory on this score and future cases are probably inevitable (especially where well-advised companies use today's decision as a roadmap for avoiding any hint of inducement).

· Main Event #2: Vicarious Liability. The Court chose to punt on this issue, choosing to base its decision on inducement instead of addressing the entertainment industry's "you could have designed it differently" theory of vicarious liability. The Court's exposition of inducement, however, suggests that it would be hostile to any theory that imposed a free-floating obligation to redesign (without any evidence of inducement) on technologists. That's good news.

· Main Event #3: Inducement. The Court conjured a new form of indirect copyright liability, importing inducement from patent law. Lawyers will be reading the tea leaves here for years to come, trying to divine the precise boundaries of this new form of copyright liability (and, contrary to what the patent lawyers will tell you, patent precedents don't resolve all the questions). The opinion suggests that copyright plaintiffs must show some overt act of inducement; the design and distribution (along with the usual incidents of distribution) of a product, by itself, are not enough. But the Court's opinion may lead lower courts to conclude that once you find an overt act, however small, virtually everything else becomes relevant to divine your "intent." That would be a bonanza for entertainment lawyers eager to foist huge legal costs on defendants. Reminiscent, in some ways, of the securities class actions that have bedeviled high tech companies for years.

http://www.eff.org/deeplinks/archives/003749.php






P2P Could Get You 10 To Life
Online staff

Being a peer-to-peer (P2P) technology provider could now get you in as much hot water as the illegal downloaders themselves.

The Supreme Court rules Monday that P2P software providers could be held liable for copyright infringements committed by the users of their software. Indeed, the majority rule found that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement."

From research firm Gartner’s point of view, the ruling links the deployment of P2P technology to the underlying business model of the P2P software provider. However, pointed out Mike McGuire, Gartner Research, the court did not expressly rule that P2P technologies are illegal, but applied a standard for inducement that holds that a developer had to engage in "purposeful, culpable expression and conduct" that led users to infringe copyrights.

“This last phrase will be pivotal when the case goes back to the lower courts,” McGuire said in a statement. “Technology companies engaged in developing new rich-media products and services will also have to pay close attention to this language.”

With the court's ruling, P2P providers will need to ensure that their underlying business models and promotional campaigns do not induce or encourage copyright violation. More importantly, P2P providers will have to decide whether unregistered "free" content will be blocked from user's search results, Gartner said, noting that that is crucial because music labels may take legal action against those P2P providers that allow free unregistered or unidentified material to show up next to licensed content

Meanwhile, McGuire believes legitimate online music services such as iTunes, Napster and eMusic, and other rich-media services, will benefit to some degree by virtue of the fact that an entire class of competitors will have to revamp their offerings, Gartner said.

Gartner’s advice to tech companies is to closely monitor and support legislative efforts to create protection for consumers using emerging search, sharing and redistribution programs. The firm also said content providers and rights holders need to develop or adopt platforms that allow the tagging of content for transmission across an increasing number of legitimate distribution services.
http://www.reed-electronics.com/elec.../CA622503.html






Suspected File-Swappers Arrested In Global Raid
Lucas van Grinsven

AMSTERDAM - Police in more than a dozen countries have seized computers and made arrests in a crackdown on illegal file- swapping instigated by U.S. investigators, the Dutch government said on Thursday.

Authorities raided several locations in The Netherlands on Wednesday as part of an operation initiated by the U.S. Federal Bureau of Investigation (FBI) and arrested three people on suspicion of computer file-sharing, the Finance Ministry said.

More computers were seized on Wednesday in Australia, Israel, Germany, South-Korea, Norway, France, Sweden, Denmark, Russia, Poland, Canada and Hungary, said a spokeswoman for the ministry, which is responsible for preventing economic crime.

The people arrested in The Netherlands are suspected of infringing the copyright of films, software and video games. Some of the titles had yet to be published, she said.

It is the second internationally orchestrated raid on computer file swappers, after the April 2004 arrest of members of the "Fairlight" group in another FBI investigation.

U.S. ARRESTS

Authorities in the United States made arrests as well, and were expected to announce the results of their raid at 2 p.m. Eastern time (1800 GMT). An FBI official declined to comment.

Illegal swapping of copyright-protected music, films, games and software over the Internet, using programs such as BitTorrent and KaZaA, is responsible for about half of all Internet traffic in many developed nations, according to market research groups.

In many countries it is not illegal to download certain digital files such as music, but it is illegal to upload them and make them available to other computer users on the Internet.

The suspected group also used other, more direct ways of swapping files, by using File Transfer Protocol (FTP) computer servers. Group members tell each other the Internet Protocol (IP) addresses of these computers, to find them on the Internet.

On Monday, the U.S. Supreme Court issued a landmark ruling that Internet file-trading networks, which also include Grokster and Morpheus, can be held liable when their computer users copy music, movies and other protected works without permission. (Additional reporting by Andy Sullivan in Washington)
http://www.boston.com/news/world/eur...n_global_raid/






Sharing isn’t pirating…

Software Piracy 'Seen As Normal'
Alfred Hermida

Campaigns to persuade people to stop downloading pirated games or software from the internet are not working, a report suggests.

Two UK university researchers found that people did not see downloading copyrighted material as theft.

The findings are unwelcome news for the games industry, which says it loses more than £2bn annually from piracy.

The results of the government-funded study were previewed at a games conference in London.

The report, called Fake Nation, is due to be formally presented next week by Dr Jo Bryce of the University of Central Lancashire and Dr Jason Rutter of
the University of Manchester.

Crime? What crime?

The study was commissioned to find out if the anti-piracy message was having an impact on people's attitudes.

Most campaigns in the UK have focused on the damage being done by software or film piracy.

They have also pushed the idea that consumers are supporting organised crime when they buy a game or DVD from someone in the street.

Despite ads in the cinema, magazines and newspapers, the message is falling on deaf ears.

"Consumers have an awareness of the scale of the problem and cost, but don't take onboard industry concerns or government messages," said Dr Bryce, a senior lecturer in psychology.

The researchers found that people did not equate downloading a game with the idea of shoplifting the disc from a shop.

"People are more accepting of it, even if they didn't engage it in themselves," said Dr Bryce. "They don't see it as a great problem on a social or economic level.

"They just don't see it as theft. They just see it as inevitable, particularly as new technologies become available."

Unsurprisingly, the main reason people grab games from the net was because they are free.

But scratching beneath the surface, the researchers found that not having to pay for games was particularly attractive for teenagers, as it meant they had more money for other things.

"Teenagers are being tactical spenders," said Dr Bryce. "The money saved lets them spend more on mobile phones, going to the cinema or eating out."

Pub pirates

In the past, much of the anti-piracy drive has been directed against people selling counterfeit discs at markets or on street corners.

The games trade body, the Entertainment and Leisure Software Publishers Association, (Elspa) has a 40-strong anti-piracy unit.

Last year, it carried out 538 raids across the UK, seizing £4m worth of copied games and successfully prosecuting 67 software counterfeiters.

But the Fake Nation study suggests these efforts may also be misguided. The researchers found that most people did not buy counterfeit software from dodgy dealers on street corners.

Instead they bought games from people they knew in places like the office, the pub or at school.

"The purchase of counterfeit goods or illegal downloading are seen as normal leisure practices," said Dr Bryce.

"The downloading of games is a burgeoning issue, and with broadband growing, this is likely to increase and drive access to pirated games away from commercial interests into people's homes."

Cost to creativity

Despite the study's results, Michael Rawlinson, deputy head of Elspa, remained confident that attitudes towards pirated software could be changed.

"It is possible to effect a change in young people's behaviour once you explain the process of creation in bringing these products to market," he said.

But he admitted that wiping out illegal downloads would take time and money.

"The government has spent millions of pounds to change public awareness of drink-driving and smoking.

"As a society, we need to go through a similar process for creativity and intellectual property."

Around 2,400 people were questioned via the post and the web for the study between August and September last year. The researchers also held 12 focus groups.

http://news.bbc.co.uk/go/pr/fr/-/1/h...gy/4122624.stm






High Court Hands Big Victory To Cable

Court overturns ruling requiring cable companies to open up high-speed Internet lines to rivals.

The U.S. Supreme Court on Monday overturned a prior ruling that required cable operators to open up their high-speed Internet lines to rivals.

At issue in the case, FCC v. Brand X, was whether cable operators should be required under federal law to lease their cable lines to competitors, much the way local phone companies were forced years ago to open up their lines to long-distance phone companies.

The justices overturned the U.S. appeals court ruling by a 6-3 vote.

In appealing to the Supreme Court, the government and cable companies argued the U.S. appeals court had not extended the required deference to the FCC's expertise and decision-making process.

Justice Clarence Thomas agreed in the majority opinion that the appeals court had erred.

Justices Antonin Scalia, David Souter and Ruth Bader Ginsburg dissented.

The decision is a big victory for the Federal Communications Commission and major telecommunications companies, including Charter Communications (Research), Time Warner (Research) and SBC Communications (Research).

On the losing side are small Internet service providers, including Earthlink (Research), consumer rights groups, and a host of local governments.

The case, which turned on the technical classification of cable modem services under federal communications law, has been described as crucial to the future of competition in the market of high-speed, or broadband, Internet service -- including how fast broadband service becomes available, what features it has, and what it costs consumers.
http://money.cnn.com/2005/06/27/tech...ling/index.htm






RIAA Sues 784 More, But College Students Unafraid

The Recording Industry Association Of America (RIAA) has announced its latest round of lawsuits against illegal file sharers. "John Doe" suits were filed against 784 more people around the country. In a statement, RIAA Chairman/ CEO Mitch Bainwol said, "On Monday, the Supreme Court provided a real shot in the arm to legitimate online music services and unanimously injected moral clarity into this debate. If there was any doubt left, there should now be none - individuals who download music without permission are breaking the law. Our efforts to defend the rights of record labels, musicians, songwriters and others in the music community from theft will certainly continue and likely be strengthened in the weeks and months ahead."

However, it seems that there is a bit of doubt out there, at least according to a new study from the Business Software Alliance (BSA). According to their results, two-thirds of college and university students do not find illegal download and file sharing unethical, with just over half believe it is an acceptable workplace practice.

Additionally, 45 percent of students surveyed said they use their campus networks for file-sharing. The same percentage believes that campus policies against illegal file-sharing are effective, though almost three-fourths of the schools' academics believe their policies work.

"Generation Y has largely grown up using the Internet and the majority of this group is extremely comfortable with technology. Unfortunately, this survey shows students who engage in these illegal behaviors are likely to continue after college and when they enter the business world," said BSA VP of Public Affairs Diane Smiroldo.
http://www.fmqb.com/Article.asp?id=97506






On Screens, but Not Store Shelves: Casual Games
Michel Marriott

Far from the bloody streets of "Grand Theft Auto: San Andreas," and light years from the deep space, run-and-gun menace of "Halo 2," lives Flo.

She is the cartoon-cute stockbroker who chucked it all to operate a modest diner that is the centerpiece of a highly successful yet relatively low-budget video game called "Diner Dash."

The game is not found on the shelves of video game or consumer electronic stores. Nor is it sold on the DVD's that deliver interactive 3-D fantasies to millions of PlayStation 2 and Xbox game consoles.

This game, sold exclusively on the Internet and downloaded onto players' personal computers, is challenging many of the conventions of video gaming. Such simple games - often called casual games - are growing more prominent in the ever-broadening game marketplace, becoming big sellers on a small budget.

"Diner Dash does not have a single end goal," said Eric Zimmerman, co-founder and chief executive of GameLab, the New York game development company that created it. "You are into it for the play."

The premise is simple: The mounting challenge is to seat, serve and collect from diners, tasks that bring to mind the "I Love Lucy" episode in which Lucy is overwhelmed by the increasing demands of a candy factory's conveyor belt.

Since the release of "Diner Dash" late last year, the hand-painted, drag-and-drop game quickly became the most requested item on major online game sites, including Yahoo Games, Real Arcade and Shockwave.com. Peter Seung-Taek Lee, co-founder and president of GameLab, said "Diner Dash" remained in the top five best sellers of downloadable games, showing considerable shelf life for a video game that never existed on a shelf.

"We wanted something that people can easily relate to," Mr. Lee said. "There is something about very simple play that gives pleasure. You can just click on it and enjoy the game."

John Welch, president and chief executive of PlayFirst, a publisher of casual games, including "Diner Dash," said the $20 game had sold more than 50,000 copies and continued to sell about 1,000 a day.

And games like "Diner Dash" have become big business. Casual games - generally simple-to-play, short-duration games that are graphically unsophisticated - will represent about $250 million a year in sales, Mr. Welch estimated. They are a small but growing sector of the overall United States game industry, which is expected to generate $8.4 billion in sales in 2005, according to a forecast by PricewaterhouseCoopers.

"It's huge in the way millions of people are playing them," said Chris Sherman, executive director of the first Casual Game Conference, scheduled for July 19 and 20 in Seattle.

He said the games' simplicity also made them ready candidates to be adapted for the increasingly attractive market of cellphones and other mobile devices.

At GameLab, which was founded five years ago, about 20 artists, programmers, animators and game designers work in closely arranged workstations in a long, narrow space carved out of an aging industrial building near Chinatown in Lower Manhattan. At one point, GameLab veterans say, the workspace looked more like a bowling alley.

Mr. Zimmerman, the chief executive, says his team generally works on three to four projects at once, taking about five to six months to complete a game. GameLab is a private company and its executives would not disclose detailed financial data, but they did say that "Diner Dash" cost between $100,000 and $200,000 to make. It sells for about 40 percent of the price of a major video game title that could cost more than $10 million to produce.

"Our modus operandi is to really create innovative games, new ways for people to play," he said as he recently walked through GameLab's studio, pointing out its museum-quality collection of vintage video game consoles, toys and stacks of traditional board games.

"For us, the company culture and the process, is really important," he said, adding that GameLab employees are given a $50 a month to spend on whatever game-related materials they want. He said they were encouraged to bring what they buy to the office. Video games, he said, must be considered within the larger category of play, a field that requires research and experimentation.

"I think part of the problem with the game industry is that there are these big projects, that people work sweatshop hours and that there's no sense of research and experimentation," Mr. Zimmerman said. "It's hard to do that. I'm not saying that we are doing it successfully, but at least we are trying to get there."

Mr. Lee, the company's president, said "Diner Dash" was designed to look and feel warmer and friendlier than expensive 3-D counterparts aimed at hard-core gamers.

"We wanted it to have a particular look," he said, noting the rich colors of the interface. "Console games look very cool and futuristic, but cold."

Yet "Diner Dash," which its makers say is quite popular among women, is not a simple "pop game," as Mr. Zimmerman refers to popular downloadable games like "Collapse" and "Bejeweled" that are descendants of Tetris and other animated puzzle games.

Mr. Welch of PlayFirst said he was drawn to GameLab's penchant for smart experimentation. His company, based in San Francisco, plays a role much like that of a record label: It fields pitches from game developers and finances the ones that seem to show the most promise.

"There is a good market opportunity while everybody is trying to figure out where the next killer app is going to be," he said.
http://www.nytimes.com/2005/06/27/te...ual.html?8hpib