Not so fast, reply Grokster and the electronics industry. The original Napster was nabbed for contributing to copyright infringement because it listed the names and whereabouts of unlicensed digital music files.
Grokster doesn't do that. It just releases software for individuals to use at their discretion. Echoing the "guns don't kill people" argument of those who oppose gun control, Grokster is effectively saying "peer-to-peer software doesn't steal music, people do." Hollywood calls that willful blindness.
To the average teenage music fan, Napster and Grokster may be a legal distinction without a practical difference. The recording studios estimate that about 90 percent of the files shared using Grokster are being shared illegally. Searching for a handle in the case after losing the first two rounds in lower courts, both the Recording Industry Association of America and the Motion Picture Association of America have resorted to filing lawsuits against the individual computer users, too.
The tech titans aren't worried about the teenagers and grandmothers being hauled into court. But with studios suing Grokster, the tech firms want to protect the Supreme Court's 1984 decision in Sony Corp. v. Universal City Studios.
That decision legalized Sony's analog videocassette recorder, the Betamax. At the time, the motion picture studios said that 91 percent of all the videotapes made by consumers were copied without permission. The 5-4 decision was unusual because Justice Sandra Day O'Connor switched sides late in the session, forcing the case to be reargued the following term. She eventually joined the opinion of Justice John Paul Stevens, who took vendors off the hook as long as their technology was "merely capable of substantial non-infringing uses."
It was a pro-innovation decision, and one very much on the mind of the current Supreme Court. Justice Stephen Breyer asked whether the Xerox machine, the VCR, the iPod or even the printing press could have moved forward with a more restrictive standard. He suggested "the monks had a fit when Gutenberg" invented his printing press.
"A very important part of the Sony analysis is that new information technology that benefits consumers is a presumptively good thing," says American University copyright law professor Peter Jaszi.
That's one reason the chief of the Consumer Electronics Association calls the decision "the Magna Carta for everyone who enjoys their iPods, TiVos, personal computers and electronic products." These companies see themselves as agents of capitalism's "creative destruction," vs. the status quo of Hollywood's existing means of distribution.
Back in the 1970s, Hollywood feared that the Japanese videocassette invasion would destroy theater and broadcast syndication revenues. But Valenti's rhetoric -- he said the VCR "is to the American film producer and the American public as the Boston Strangler is to the woman home alone" -- proved hyperbolic. Instead, studios adapted by creating new revenue streams like cable television and VCR rentals. Home video rentals now provide the studios with more money than box office sales.
A similar pattern happened earlier in the 20th century. The player piano, the phonograph, radio and television each forced changes in distribution. Often, Congress revised copyright laws to protect artists' royalties, but copyright holders also adapted successfully to innovations.