03 July 2005

Grokster Conclusion: Everything Old Is New Again

Where does Grokster point us? Not in the direction that either of the posturing sides would have us believe. What Grokster does is revive an 18th-century way of looking at indirect copyright infringement.1 That is all too appropriate, as neither side seems to be looking at the two halves of the 18th-century Constitutional foundation of copyright: The Intellectual Property Clause. Although I've quoted it repeatedly in this blawg over the last couple of years, it bears quoting again:

Congress shall have the power… To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries[.]

U.S. Const. Art. I, § 8, cl. 8. We've got two critical concepts here: promoting "Progress", and "exclusive Right" "for limited Times." This, in turn, leads to a few observations (lettered for later reference):

  1. Not everything that is "new" is necessarily "Progress." It's hard to argue, for example, that a new formulation for nerve gas represents "progress"; nor a business method optimized for liquidation of political opponents or an ethnic group in a concentration camp; nor the Pr0t0c0ls of the 3lder5 of Zi0n. Conversely, some things that might not seem like "progress" at the time might turn out to have unexpected benefits; consider the breaking of the Japanese cipher systems in the late 1930s and 1940s, which is an unlawful purpose! The point is that there is a set of "new stuff" that might not constitute "Progress" out there. In copyright law, the most obvious type of that material is the "insufficiently original" derivative work.
  2. Neither "Progress" not "exclusive Right" has primacy. They are inextricably interlinked, particularly compared to Congress's other powers. Only one other enumerated power even arguably has precatory language limiting its purpose (cl. 15, "To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions"), and that is only a fairly weak argument as it is a specific limitation on the use of something else enumerated among Congress's powers. That, in turn, means that the purpose and the power are coequal in extend.
  3. The power is to grant an "exclusive Right" "to Authors and Inventors", not "to media conglomerates and huge industrial corporations". Congress has gotten around this limitation in an interesting fashion: On the one hand, the concept of "work for hire" and copyright transfers, and on the other hand the concept of invention rights transfers and application in corporate name.2

In one sense, we're going back to the future; or, more aptly, must realize that everything old is new again.

  1. Contrary to the misstatements of some technology advocates, the concept of "inducing infringement" is not a "new" cause of action, theory of copyright infringement, or indeed anything. The Second Circuit used similar language in Gershwin Publishing Corp. v. Columbia Artists Mgmt., 443 F.2d 1159, 1162 (2d Cir. 1971); going back farther, that theory underlies the piano-roll case (White-Smith Music Publ. Co. v. Apollo Co., 209 U.S. 1 (1908)), particularly in the lower courts, and English decisions stretching back to 1768. It's even discussed in detail in Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir. 1963)—a case cited by both sides in their papers—which itself disclaims that vicarious infringement is a "new" theory.
  2. P2P communication is here to stay. If there is one thing that one can draw from Grokster, it is that the technology ("Progress") represented by peer-to-peer file sharing is a place that the Court would rather not go—Justice Souter's apparent appreciation for Modest Mouse notwithstanding. The key factor in indirect infringement appears to be not the technology or particular kind of "Progress" involved, but the effect of the particular implementation of that technology upon the exclusive right of a third party. In other words, absent substantial evidence of a business model devoted explicitly to piracy, BitTorrent per se is probably safe. However, the rumored Microsoft follow-on, which is allegedly being considered for Longhorn (the several-years-off successor to WindowsXP), may not… depending on exactly how it is promoted (among other factors).
  3. Post-hoc rationalizations may be at best deflective devices: It's the apparent business purpose that will get one in trouble. Proclaiming that one wants to take Napster's market share after a finding that Napster is unlawful can be extremely dangerous… unless, of course, one is licensed to try to take that share, as are "Napster 2.0", iTunes, Rhapsody, etc. Remember, that's not a "right to profit" from inventions and writings—it's an "exclusive Right." It will be interesting to see whether the after-the-fact disclaimer of the so-called "BitTorrent Manifesto" as being a parody has any effect… if, that is, someone is stupid enough to sue Bram Cohen based only on his creation of the software.
  4. Sadly, the quality of lawyering appears to matter more than ever at the margins of doctrine. It's clear that the defendants in Grokster didn't have very good lawyering at an early stage; if they had, they would have been more circumspect in their public statements, the evidence admitted against them would have been more ambiguous, and so on. By the time EFF got involved, it was probably too late to save them. I don't think the particular litigation strategy in this matter was especially helpful, either, but when handed a losing case sometimes one has little choice.
  5. No one piece of evidence is definitive. If one takes nothing else away from footnote 12, one must understand this: The evidence must be looked at as a whole, not piece by piece (except, perhaps, if a single piece of evidence would be enough to deny summary judgment, as in Ellison).3
  6. The rhetorical excesses surrounding this matter have been absolutely appalling and reflect poorly upon the participants and sometimes their counsel. For example, consider the irony of calling the inducement theory a "new" one and then decrying it… which, if it's correct that the theory is new (see point I above), means that the technology advocates who hold that "all change is good" are arguing against progress in the development of the law of indirect copyright infringement. To put it another way, the tech advocates argue that their settled expectations of nonliability (whether valid or otherwise) should outweigh the settled expectations of rights-holders. Down that path lies madness.

The Grokster case reminds me very much of a remark that Professor Wayne LaFave made during the first session of Criminal Procedure (which, in turn, was my very first class in law school—and probably the most difficult final exam): roughly that almost all of the cases we'd be covering—search and seizure, self-incrimination, right to counsel—involved substantively guilty defendants. The Gideons of this world—the substantively innocent (at the appropriate standard of proof) defendants—are extremely rare. At least based on the various courts' descriptions of the evidence in the record, that is precisely what we have here: both Grokster and Streamcast (or, rather, the business entities hiding behind those labels and their respective principals) are in any objective sense guilty of purposefully facilitating widespread piracy of copyrighted materials to which they have no right or license. This, in turn, calls into question the litigation strategy of putting forth these particular defendants as paragons of the way the technology advocates want the technology portion of the law to develop. Frankly, they got what they deserved: A decision that didn't grapple with what they wanted it to, but instead fell back upon tried-and-true theories of unjust enrichment and interference with contractual advantage.

"Unjust enrichment"? Where did that sneak in? It's not anywhere in any of the opinions! So why are we considering first-year contract law? Well, the most rigorous answer is "we're not: we're considering the relationship of potential remedy to liability, and that relationship is behind virtually all of the common law." For, in the end, that is what the evidence in Grokster points toward: Use of copyright law to prevent unjust enrichment achieved through violation of an exclusive right. Absent the economic factor, it's a lot harder (not impossible, merely harder) to say that mere technology violates a conception of copyright that reads the Intellectual Property Clause as a whole.

  1. Although Justice Souter uses the term "secondary infringement," I will continue to use "indirect infringement" for two reasons. First, it's grammatically more accurate; the act of actual copying is referred to as "direct infringement," not "primary infringement." If we had historically called it "primary infringement," then "secondary infringement" would indeed be the best choice. Second, I'm speaking of something slightly broader in scope and conception than is Justice Souter. Only slightly, as Justice Souter's reasoning applies in toto to my conception of "indirect copyright infringement;" but certain circumstances at the edges of Justice Souter's "secondary infringement" (a combination of "contributory" and "vicarious" infringement, informed by the economic motivation to infringe) might give different results than my concept of "indirect infringement" (the total circumstances of the enablement of a third party's direct infringement). For example, I think a patented invention with a physical expression might have differing levels of liability, and certainly different remedies for liability, under the kind of theory Justice Souter puts forth and the broader conception of "indirect liability" I would prefer. But that's for a law review article. Or two.
  2. I have grave doubts about the constitutionality of the WFH doctrine, as I haven't been able to find authority that allows Congress to redefine what was a fairly unambiguous term to mean something at odds with the purpose of the statute that it adopted a couple years after the drafting of this clause. Remember, the Statute of Anne (1710) explicitly disapproved of ownership of the copyright by other than the actual creator. Prior to the Statute of Anne, rights ownership rested exclusively in the publisher, pursuant to a Star Chamber decree intended to prevent religious dissidents from lawfully printing their tracts. In other words, prior to the Statute of Anne, copyright was not a means to "promote Progress," but to promote religious conformity—that is, it was a censorship device. Unwinding this further is for another time.
  3. This is the point that Justice Breyer and Justice Ginsburg argue in their concurrences: What the totality of the evidence will ultimately mean. Of course, they're arguing from a restricted factual record, too; there have been no live witnesses, no battles over leading questions, etc. It's entirely possible that a trial might change their minds. And that is the point of denying summary judgment here; and it is also the point that almost all of the commentators who have dogs in this particular fight seem to be willfully blind to. The irony of willful blindness when Justice Souter's decision almost alludes to that concept, and Judge Posner's decision in Aimster invoked it explicitly, is also rather obvious.