26 June 2005

Another Advance Note on Grokster

One of the major problems with the entire Grokster debate is that it turns on some theories of copyright infringement that are not explicitly provided for in the Copyright Act. Unfortunately, the rhetoric turns on absolutism, too; but that isn't exactly a surprise by this time, is it?

When most people think of "copyright infringement," they think of the actual copying—what those of us who practice in the area call "direct infringment." That, however, is not the only theory of copyright infringement upon which a case may rest, although a direct infringement by someone is a prerequisite to an indirect infringement. A second, broader type of infringement is generally (and probably misleadingly) called "contributory infringement." A contributory infringer isn't the person who does the direct infringement, but is instead the person who knowingly provides essential facilities to enable the direct infringement. At one extreme, one can imagine a photographer walking into OneHourPhoto with a roll of film, saying "I just duplicated this month's Playboy. Would you please process this roll of film optimized for further reproduction?" A vicarious infringer isn't the person who does the direct infringement, either, but is instead the person who provides essential facilities to enable the direct infringement but does not have specific knowledge of the infringement. The classic example of this is the music store that contracts its stockage to a company that includes pirated sheet music in its standard stock list, or the fleamarket/auction host that allows pirating companies to use its facilities.

Note the change in rhetoric there? I think it's an important one. Direct infringement can be casual, as in walking into the library and making a photocopy of this month's issue of Wine Spectator (leaving aside that there's a special provision for library photocopiers). I don't ordinarily refer to that as "piracy." Copyright piracy, instead, involves systematic copying and redistribution. Extending the word "piracy" beyond a conscious, systematic effort involving redistribution seems a mistake to me. Another change in rhetoric that I'd prefer to see is eliminating the purported distinction between contributory and vicarious copyright infringement; instead, I prefer the term "indirect", which is less inflammatory, more accurate. and a better description of the general class of behavior without getting bogged down into questions of "fault." Copyright is, after all, a strict liability statute; importing fault into it should concern only the remedy (or perhaps highly limited defenses), not liability. However, that would require a wholesale rewriting of the law of indirect infringement by Congress, which Congress explicitly refused to do when adopting the DMCA.

So, where is this going? Some commentators (like, but not only, this one in "main event #2") have erroneously claimed that the Supreme Court has never dealt with vicarious copyright infringement and/or its limits. Admittedly, it has not used the term, nor has it done so implicitly in a very coherent fashion. However, indirect copyright infringement was a necessary consideration in Feltner, Tasini, and Quality King, and forms the (shaky) foundation of the inelegantly analyzed majority opinion in Sony. Further, the doctrine has been around since the 1920s, and explicitly delineated since the 1940s.1 Grokster provides the Court an opportunity to step into this morass. In the best of all possible worlds, it will explicitly abrobate the terms "contributory" and "vicarious" and substitute "indirect", establish boundaries and a multifactored test parallel to that in § 107 for fair use, and let the lower courts apply the law to the particular circumstances. Since that's not what either side asked for, I don't see it happening; and, in any event, this is not the best of all possible worlds.

I've found it most useful over the years, particularly when evaluating the strength of a case, to think of distribution channels as pawnshops (which, given the first-sale doctrine, should be an obvious analogy). Pawnshops, as a general comment, don't have that great a reputation. However, their business model is neither inherently lawful nor inherently unlawful. Instead, some pawnshops police themselves for legitimate merchandise and offer fair terms to customers; others… do not; and still others are nothing more (nor less) than fencing operations. However, the very nature of the business creates a nonzero risk that pawnshop X will have, during the course of a year, at least one piece of stolen property in its inventory. That does not mean that a pawnshop in the first class should be shut down.2 The fencing operation owned by Don Corleone is also an easy case; with no way to get rid of stolen merchandise, the incentive to steal becomes lower, etc. The middle case is the hard one—or, rather, distinguishing between the middle case and the outright fencing operation. This is where Judge Posner's comments on "willful blindness" become most relevant.

Whether the record shows it or not, my belief is that the software providers and network providers in Grokster are far close to the third class of "pawnshops" than to the first class of pawnshops. However, I have not seen the evidence; I infer this from the public behavior and statements, and not a particularly comprehensive examination of them, either. In turn, this makes Grokster a civil procedure case. Again.

  1. Most of the "heavy lifting" was done by the Second Circuit. The more-deeply I look into the theoretical basis for copyright doctrine—whether at the abstract level of "this makes sense" or the slightly less abstract level of "this is what the statute necessarily means consistent with the IP Clause"—the less enamored I am of the Second Circuit's historical (and continuing, thanks to Professor Nimmer's treatise) dominance. Basically, I am becoming less and less convinced that some of the "giants" of copyright law in the Second Circuit have provided us material that remains vital. The Second Circuit's obstinate refusal to reexamine longstanding doctrine in the face of the radical changes imposed in the last thirty years—first by the 1976 Act and later by accession to the Berne Convention and WIPO—in the name of "settled precedent" remains puzzling to me.
  2. Conversely, a shop in the last class—the pure fencing operation—might have some legitimate merchandise on its shelves at some time during the year, too. This may be by accident, but is more likely part of an effort to maintain a veneer of legitimacy. That effort, though, goes to the appropriate remedy, not to liability.