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Courting an appeal

Supremes tackle case involving P2P nets

Internet piracy is going before the highest court in the land.

The U.S. Supreme Court has decided to hear the appeal from the MPAA, the Recording Industry Assn. of America and the National Music Publishers Assn. of an Appeals Court decision declaring peer-to-peer networks, where most music and movie piracy takes place, can operate legally.

Insiders on both sides agree the case will hinge largely on the Court’s interpretation of the 1984 Betamax decision, in which the court ruled that VCRs are legal even though they can be used for illegal copying.

Because that case also was decided by the Supreme Court, attorneys expect justices to focus on whether P2P technology should be judged in the same way, or whether the ease of mass digital copying makes it different.

Lower courts have focused more on the legal decision outlawing Napster, which the Appeals Court said was different because Napster servers indexed pirated content and were necessary for piracy, while servers for Grokster and Streamcast affiliate Morpheus do not.

Decision will have implications not only for P2P operators Grokster and Streamcast Networks, defendants in the case, but big media’s entire legal strategy in combating piracy.

MPAA and RIAA are hoping a victory would not only allow them to go after P2P technology rather than individual downloaders, but influence countries around the world to follow suit and crack down on the technology.

“The Sony Betamax decision had dramatic ramifications on the law around the world,” said Dean Garfield, MPAA veep in charge of antipiracy legal affairs. “I think the ramifications are huge.”

Technology companies counter that P2P will live on, regardless of whether governments outlaw them, and argue that a decision against them could stifle innovation.

“They can pick off countries, but P2P is here to stay because it doesn’t have boundaries,” Streamcast CEO Michael Weiss said. “Entertainment companies want to keep companies like mine from freely developing so that they can control the technology.”

RIAA topper Mitch Bainwol replied, “These are questions not about a particular technology, but the abuse of that technology by practitioners of a parasitical business model.”

Added MPAA chief Dan Glickman: “The motion picture studios each embrace and support innovative technologies that have the potential to offer consumers more ways to view the films they enjoy. However, companies such as Grokster and StreamCast that openly profit from the misuse of copyrighted materials while attempting to avoid legal liability should not be protected by the courts.”

Helping entice the Supreme Court to hear the case was a broad coalition organized by the showbiz trade orgs to support their appeal, ranging from the Hollywood guilds to Netflix to the NBA.

Case will be argued in late March and a decision is expected by the end of the term in June.

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