Wu: iGrokster

An already mainstream view, held by many people I respect, including Doug, Fred VL, Cory Doctorow, Rebecca Tushnet, and others, goes like this: Grokster's intentional inducement is too vague a standard and will chill innovation. How can an innovator know whether their typewriter, pen, VCR or filesharing machine will be perceived as illegal? Will Rip, Mix, Burn put you in jail? Who can know?

The opposite view, held at times by Lior, and perhaps others, is that Grokster makes it too easy to evade contributory liability. All you need to do is pretend to write Kazaa without the ads and away you go. Grokster is a joke.

With respect, I think both of these perspectives are mistaken.

First, I think its important to appreciate the superficiality of the new Grokster rule. It is a decision that regulates business practices rather than technologies -- more technically, it is a rule for clients, not protocols.  Nothing in the decision condemns SMTP, HTML, Bittorent, ICQ, or any of the other great inventions that have made it easier to share information.  Protocols, aka "standard articles of commerce," are still covered by the Sony rule.

To be clear about this, we might say that Grokster is the law of clients, and Sony is the law of protocols. For those who like layered models, we might say that Sony covers everything but layer 7 (and also transport protocols in layer 7). And while the 3 votes against Sony are regretable, they aren't the holding.  Nor is Aimster.  Sony is still Sony.

So what is Grokster like as client-regulation? The criticisms of Grokster described above lack confidence in intent-based standards. Both criticisms assume that intent is either dangerously easy (Fred VL) or dangerously hard to prove, respectively.  But I believe intent-based tests are fundamental to law, and in practice do not necessarily suffer from the problems described.

As I see the Grokster test, it is akin to a species of unfair competition law. It damns a business-practice -- it says you cannot run a business whose revenue model is premised on encouraging illegal acts. Doctorow calls that a thought-crime, but it is common for businesses to be so limited. For example, most obviously, business may not create price-fixing agreements, which you might also call a "thought-crime." The point is that intent based-standards are common in the regulation of business, and it is neither trivally easy or trivally not easy to prove intent.

Second, while many seem to disagree, I see the Grokster intent model as subject to various safe-harbours designed for operations like iTunes, and also subject to FN12. I wrote about that earlier, and won't repeat it here.

The results of Grokster, then, might be summarized as follows:

Legal, and safe-harbored
  (1) File-sharing protocols of all kinds (SMTP, FTP, HTML, Bittorrent, Gnutella)
  (2) Clients that are neutral and designed for legal uses (Browsers, email, ICQ)
  (3) Clients that take safe-harbor measures (iTunes)

Illegal
  (1) Clients that can control illegal use and don't stop it    (Napster)
  (2) Protocols that are designed only for illegal uses (Sony).
  (3) Clients that encourage illegal uses (Grokster).

Let's take Bittorrent as an example, as Ed Felten already has...

The full analysis is complex, and Mark Schultz and Ernie Miller have done a good job outlining how it begins. But in general what iGrokster and Sony say is that the protocol is fine, and that a no frills, basic Bram Cohen client is fine.  However, sites like SuperNova, that promised access to all the free music you can eat, are easily illegal under the Grokster rule (and possibly Napster).  For regular Bittorrent related sites, staying pure and legitimate will both avoid liability, but then also ultimately limit Bittorrent's popularity and effects.

Finally, none should forget that Grokster does not eliminate the Darknet -- true anonymous, secretative filesharing.  If you still want that, its there.  Grokster just makes it hard for the Darknet to grow beyond a certain size.

* * *

In our discussion of the zoning of the industry, first, thank you Ariel Katz.  Some (including Randy) have questioned my equivocation of P2P systems and iTunes, saying that Grokster didn't say anything about iTunes.

While of course the technology is different, the important fact is that these are competing information distribution systems -- more specifically, competing ways of getting music. So first, I don't think we should differentiate between iTunes and P2P systems in trying to understanding the future of the industry.

Second, iTunes does, contrary to what Randy says, have legal questions answered by Grokster. While iTunes has licenses, that doesn't mean that iTunes itself does not run any legal risks -- for example, it may be accused of facilitating illegal sharing as between its customers. The important thing about Grokster is that is blesses iTunes -- because, by implication, it immunizes iTunes from any intermediary liability through what I've called the Grokster safe harbor. More specifically, in response to Tushnet's concerns, so long as Apple places restraints on the mass sharing of its files, it can say "Rip, Mix, Burn" all it wants.   And while this is a closer question, under FN 12, Sony circa 1976 should still be okay with its ads.

To refer back to a Slate posting, the upshot is a Court that is encouraging companies to push the limits in respectible ways.  All this is why Grokster can be, as a I said before,  summarized in one sentence. The court, in short, curses Kazaa, blesses iTunes, and says that Tivo is okay too.

Comments

[Rebecca Tushnet]

Tim, as always you make interesting reading -- but I think you're conflating iTunes with the iTunes store. As others have pointed out, one fills one's iPod mostly with music that isn't purchased from the iTunes store -- I am a heavy iTunes store user, I suspect, and I have slightly under 300 songs in my "Purchased Music" sublibrary, out of a total collection of over 6700 songs.

"Rip, Mix, Burn" promoted iTunes, not the iTunes store. "Rip" only matters if you have CDs, since purchased iTunes files come preformatted for iTunes. Purchased, DRM-protected music can't be shared without either circumvention or quality-diminishing re-encoding, but iTunes does nothing to limit massive distribution of all those mp3s it encourages you to rip from your own collection (or download from others' to fill that nice big iPod). There is no encryption on ripped files, no deal with the record industry, and I just don't see which safe harbor you think helps immunize "Rip, Mix, Burn" in particular. This is not important for iTunes, since you're right that as a business matter Apple is unlikely to get sued. It's important for the next music player startup that doesn't happen to have music deals in place already, that maybe wants to make money just through the player without having an associated music store.