What we should be thinking as we watch file-sharing networks drop like flies

The future for peer-to-peer file sharing services is, lately, looking a bit bleak. The page for StreamCast Networks’ Morpheus has a disclaimer about copyright infringement at the bottom that has grown to about three times its former length over the past two months. LimeWire now requires users to agree that they “will not use LimeWire…for copyright infringement” before they can download the software. The page for i2hub, which closed down last week under pressure from the recording industry, has been replaced with a simple memorial reading “Remember i2hub. R.I.P. 03.14.2004-11.14.2005.”

And then there’s the Grokster, notable for its role in a recent suit by MGM that went all the way to the Supreme Court, which now observes on its page that the use of its service to trade copyrighted material was, as “unanimously confirmed” by the Court, illegal. Grokster wasn’t shut down, per se, but it has voluntarily closed its doors as part of a settlement until it can launch a service that meets industry approval. MGM v. Grokster was handed down on June 27 and substantially shook up our understanding of what is and isn’t legal in the world of internet file swapping. A brief history lesson is in order:

Surely everyone at Harvard is old enough to remember the days of the VHS cassette, those big clunky pieces of plastic filled with magnetic tape which had to be rewound before they could be returned to Blockbuster. It turns out 1984, the year most current seniors were born, was an important year for VHS tapes, and for the two decades of technological innovation which followed.

In that year, the Supreme Court decided a case between Universal Studios and Sony in which the former alleged that video cassette recording devices made by the latter were being used primarily for copyright infringement and should be made illegal. What the court said was, because there were “substantial noninfringing uses” for VHS tapes (they could be used to record religious, educational, and sports programs, for example), the studios could not go after the makers of the technology, only the infringers themselves.

What this meant was that innovators and inventors were free to think and build without having to worry about being liable for intellectual property damages caused by their work. All kinds of technologies which could have been used for copyright infringement—mp3 players, certainly, but perhaps also things like the World Wide Web—were popularized largely free from those sorts of legal worries.

Certain early peer-to-peer file sharing services like Napster still found themselves in deep water because they used central servers which, the courts decided, played a more profound role in copyright infringement than merely as an enabling technology. Still, so long as a product had certain features which meant that the company running the service never directly contributed to the creation of illegal copies (like a KaZaA or Grokster), it could rest reasonably well-assured it would not be forced to shut down.

The wrench that the Court threw into the works in the Grokster case was to say that a simple doctrine of “substantial noninfringing use” was not sufficient. If, as the music industry argued, a peer-to-peer network was encouraging (or, in the language of the decision, “inducing”) its users to commit copyright infringement, the Court held that the network could be held liable for the infringement.

What exactly ‘inducing’ means is not at all clear, and this has been the center of a great deal of controversy since the decision was handed down. Still, at the very least Grokster and i2hub seem to have decided that their actions were sufficiently close to the line (or their pockets were sufficiently shallow) to make defending themselves against the heavy hand of the recording industry impractical.

Something about this situation feels “right.” For one, to the extent that i2hub was known on Harvard’s campus, it was known as a place where Harvard file-swappers had been caught infringing copyrights and sued (several as recently as earlier this month). The service had likely legitimate uses, but they were not the reason for the service’s financial success, and its downfall would never have received much publicity were it not for the illicit activity which took place under its auspices.

But let’s not be hasty. A concept frequently tossed around in legal circles is the doctrine of “chilling effects,” the notion that an unclear standard of law can discourage innovation or progress by leaving its would-be heralds unsure of their standing. The Grokster inducement standard is nothing if not unclear—the court opinion itself was decidedly vague (it left even the question of Grokster’s own activities open for a lower court to decide), and it hasn’t been tested in court yet because the expense of litigation tends to drive people towards settlement. What technologies will now never see the light of day because their developers aren’t willing to take on the potential risk?

Lest we think this is only a problem for us laypeople, it should be noted that the record labels might also feel uneasy about Grokster: the inducement standard is sufficiently vague to allow those with genuinely malicious intent easy loopholes. i2hub and Grokster may have shut down, but Morpheus and LimeWire both felt they could sufficiently protect themselves simply by adding disclaimers (which seem likely to be rather ineffective in practice).

Despite that it has been nearly five months since Grokster was decided, we’re just now beginning to feel its influence. What happens next will be something worth watching carefully. Lawyers, technologists, and scholars of copyright law will want to watch the space of new technologies and try to understand the impact of the new uncertainty on what people are willing to do. Artists and those who work with record labels will want to understand better the restrictions on where and how their work can be distributed. And as for college students, well, at the very least this means that those who rely on i2hub or Grokster and want to listen to Wyclef will, for the second time in recent memory, have to seek out other options.

Matthew A. Gline ’06 is a physics concentrator in Quincy House. His column appears on alternate Tuesdays.