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CONTACT: Patrick Ross
January 24, 2005
(202) 289-8928
High Court Must Balance Sony, Eldred
PFF in Brief Urges Grokster be Overturned

WASHINGTON D.C. - The Ninth Circuit in its Grokster ruling failed to see that avoiding inhibitions on technological progress and fostering the production of content by providing incentives to creators are complementary, not conflicting, interests. Thus, two Progress & Freedom Foundation senior fellows urged the U.S. Supreme Court in an amicus curiae brief filed today to reverse and remand that decision. The brief was authored by James DeLong, director of PFF's Center for the Study of Digital Property, also known as IPcentral. PFF Senior Adjunct Fellow Solveig Singleton joined in the petition.

"The Ninth Circuit focused totally on the need to avoid any inhibition on technology," DeLong wrote, "and in so doing it lost sight of the equally important consumer interest in promoting content." As he did in PFF's brief to the High Court urging it to take Grokster, DeLong cited the Prisoner's Dilemma to show how any system that allows unfettered access to copyrighted works without compensation will lead to a rapid collapse of that system, as there no longer would be any incentive to create and distribute new content.

"The dispute here cannot be characterized as a contest of 'content providers vs. tech companies,' or 'producers vs. consumers," DeLong wrote. "It is not a zero-sum game, in which gains by one interest are the reciprocal of losses by the other." Here again the Ninth Circuit erred, by interpreting the language of Sony regarding capability of substantial non-infringing use. "No one in this case argues that P2P as a technology should be banned. The issue, rather, is the business practices which the filesharing companies are wrapping around this technology."

The High Court needs to look not just to the 1984 Sony decision but also to Eldred v. Ashcroft. The Court in that 1993 case noted that "copyright law serves public ends by providing individuals with an incentive to pursue private ones." It supported that argument by quoting James Madison in The Federalist as arguing that with copyright "[t]he public good fully confides... with the claims of individuals."

DeLong wrote that "the consumer interests embodied by Sony and Eldred should not be called 'competing values' because they do not contradict each other. Each is absolutely necessary to the full consummation of the other. Consumers are not served by the existence of an infinite amount of dazzling hardware if they have no content for it, nor are they served by libraries of content if they lack means to enjoy it."

The Supreme Court hears oral arguments in MGM Studios v. Grokster on March 29th. The Ninth Circuit last summer upheld a lower court ruling in Grokster that P2P software providers couldn't be found liable for copyright infringement by P2P users. That decision contradicted Aimster, and ignored the Seventh Circuit's view in that case that corporations shouldn't necessarily be able to hide from the criminal activity of their customers under "willful blindness." A decision by the High Court is expected by the end of June.

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



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