CHICAGO, March 30 (UPI) -- Hollywood during the 1980s worried that videocassette recorders would savage the movie business, furnishing fans with free access to films copied from rental tapes from video stores. The industry was so worried, in fact, that it took the case all the way to the U.S. Supreme Court, in Sony vs. Betamax, hoping to protect its intellectual property rights.
Two decades later, the entertainment industry is back in court, arguing this time that Internet file sharing of music and movies is illegally gnawing away at its profits -- like Godzilla gobbled up Tokyo. Last time, the justices ruled for the VCRs, but experts told UPI's The Web they are unsure who will win the battle over file sharing.
"There were protesters with placards, chanting in front of the court," said Daniel Fisher, an intellectual-property lawyer with Millen, White, Zelano & Branigan in Arlington, Va. "That was surprising; that was a lot of excitement. Usually, intellectual-property cases are more mundane, but this is about the future of the industry. There was one sign that said, 'Save a musician, download legally!'"
The new lawsuit was filed by MGM against Grokster, the file-sharing service located in the West Indies. The case started in federal court in Los Angeles and moved up through the 9th U.S. Circuit Court of Appeals in San Francisco. The appeals court ruled that the 1984 decision from the U.S. Supreme Court on Betamax was relevant. That case allowed home users to make copies of TV programs. The reasoning was if the copies were made for personal use, there was no copyright infringement.
Counsel for MGM, however, was aggressive in court Tuesday, where even ailing Chief Justice William Rehnquist showed up for oral arguments. Lawyer Donald Verilli told the justices the file-sharing software, which allows Internet users to swap songs by their favorite performing artists, has created an "infringement machine" that has cost the industry one-quarter of its revenues in recent years.
Developers Grokster and Streamcast -- which distribute Kazaa and Morpheus file-sharing software, respectively -- claim they do not contribute to any copyright infringement that may be occurring. Rather, they say, there are legal uses for their technology and they cannot stop people from using it illegally.
"The ramifications of this issue are, at the polar extremes, technologies like Tivo and iPod disappearing," said Fisher, who filed a friend-of-the-court brief on behalf of his client, the IEEE, a professional association of electrical and electronics engineers.
"If liability were there for the makers of technology that could be used for file sharing, no manufacturer would make an iPod," Fisher said.
He added it is likely the court will not rule to discourage manufacturers from making these new technologies for playing TV and music programming. The lower courts did not specifically address the issue of "inducement to infringe" on the copyrights of the musicians and movie producers, he said.
"The trial court had a summary judgment. They did not address the issue of inducement to infringe," Fisher said. "During the arguments at the Supreme Court, some of the justices were concerned that they did not get the whole case. They treated the lawyers with respect -- and were uncommonly well-versed on the issues and asked penetrating questions."
One issue the justices raised was whether it was OK for a company to bootstrap itself into business with an application that it knows can be used for illegal purposes, and then, when it is making money, claim it never intended the product to be used illegally.
"The questioning was interesting," Fisher said.
Still, it is likely the unresolved part of the case may resume in the lower courts, Fisher said.
Justice Antonin Scalia, considered to be on the short list for Chief Justice should Rehnquist, who is battling cancer, steps aside, said in court if the justices ruled against the file sharing companies it might mean that all new inventors are "going to get sued right away."
Legal experts said new technologies always foster moral considerations that wind up in the courts.
"Whenever a new technology is developed ethical questions arise," said Yale Braunstein, a professor in the school of information systems and management at the University of California, Berkeley. "It happened when the photocopier was invented -- and it happened with the player piano, too."
Some experts think the case in court Tuesday gives the justices the chance to right an even greater moral concern: whether the music industry is a monopoly that unfairly uses its copyright protection.
Seton Hall Law School Professor Frank Pasquale said he wonders whether the music industry's copyrights are valid, for they may have misused them to make themselves a monopoly.
Also, there may be "bad consequences for the record industry even if they win" this case, Pasquale said. These might include bad publicity and further market erosion.
More conventionally, lawyers Charles Ortner and William Hart of Proskauer Rose, who represent the National Academy of Recording Arts and Sciences, have taken the position that if the Supreme Court does not overturn the lower court decision on the Grokster case, and does not find the file-sharing companies liable for illegal file sharing on their own networks, there could be detrimental effects on the entire U.S. economy and American culture, for musicians and artists will be discouraged from making a living from their works.
In a brief filed on behalf of the artistic community, Proskauer Rose argued that thousands of writers and recording engineers -- not just the famous ones -- benefit from copyright protection.
Tulane University Law Professor Glynn S. Lunney said given the uncertainty surrounding the actual impact on revenues of the file-sharing technologies, the likelihood is the court will allow file sharing, also known as P2P or peer-to-peer networking, to continue, just as it allowed VCRs to proliferate two decades ago.
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Gene J. Koprowski is a 2004 Winner of a Lilly Endowment Award for his columns for United Press International. He covers telecommunications technologies for UPI Science News. E-mail: [email protected]
