Supreme Court versus Innovation

Monday, June 27, 2005 | 05:30 PM

While the entertainment industry is cheering the Grokster decision, I am concerned about the issue of vicarious liability and the thwarting of legitimate innovation. I suspect ultimately the decision will be terrific for Trial Lawyers, but not so great for everyone else.

Example:   What does the Grokster decision means for Google? The comapany just rolled out Google Video, a search tool that lets you find video on the Web. Let's say you use that to find copyrighted material on line and then I download what you find, is Google now viacariously liable under this decision?

Even worse, is there now no bright line standard, as their was in the Beta-Max case. Now, we should expect a ton more litigation, all on a very piecemeal basis. I'll bet SCOTUS will be forced to revisit this decision after a decade or so.

How will the Grokster case stop the 100 to 200 million PCs that have grokster installed from file swapping? Its decentralized and the company cannot control it.  (hint: it won't)

The bigger concern is now litigation risk: While file swapping will continue unabated, legitimate innovations and (previously) legal applications may not get venture funded. That's not good for innovative companies like Apple and TiVo.

I wish the Supremes woulda stuck with their BetaMax decision . . .

Monday, June 27, 2005 | 05:30 PM | Permalink | Comments (2) | TrackBack (1) add to | digg digg this! | technorati add to technorati | email email this post



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Tracked on Jun 27, 2005 5:44:57 PM


I think the big difference is that while sharing programs are capable of it, there has been less than substantial non-infringing use of the programs. There has been substantial use of publishing programs like the web and BitTorrent to publish original content. The only actual non-infringing content published by sharing programs is stuff copied from the web and the spyware that frequently gets included in free downloads. I hope the loss of Grokster will reduce the demand for legislation that may actually harm publishing programs and threaten BetaMax.

There may not have been much economic damage from sharing. Payola and independent promoters show that the market price for disposable music is frequently negative. I think the biggest problem is that with most music prices being fixed at zero by sharing there has been much less innovation in micro-payment then there should have been. Music publishing should be the driving innovation for micro-payment both to labels and to individual publishers. Instead, sharing programs have been driving innovation for their paying customers: spammers and spyware publishers. The customer is always right. It is best that the customer be the consumer.

Posted by: TDM | Jun 27, 2005 8:16:23 PM

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