"There is a possible middle way that should be considered, and that is to provide a safe harbor to potential contributory infringers who take all reasonable (cost-justified) measures to prevent the use of their product or service by infringers."

Did Sony do this in the Betamax case? No. Does TIVO do this today? No. In fact, doesn't TIVO SPECIFICALLY promote infringement with their commercial skip feature? The difference in the Court's opinion lies mostly in their unfamiliarity and lack of identification with technology in question than in any substantive difference with the Betamax case.

"Software producers would be excused from liability for contributory infringement if they designed their software to prevent the copying of a tagged file."

If software is designed according to basic software engineering principles, it should be easy for anyone with access to the source code to add or remove support for various types of data filtering, including recognition of copy-protection flags, without otherwise affecting the functionality of the software.

What would become of software producers who make the source code of their products available to their users? Would they be simply ineligible for safe harbor under this hypothetical measure? If not, would they have any responsibilities in terms of not making it too easy to remove the copy-protection code? Would a HOW-TO document constitute crossing the line? How about a compile-time flag?

./configure --no-DRM
make
make install

"Software producers would be excused from liability for contributory infringement if they designed their software to prevent the copying of a tagged file."

While not being able to produce a mathematical proof of it, I strongly believe there is no such DRM system that cannot be broken at a cost comparable to that of a conventional media-reader device (e.g.: a CD reader).

And, while I mean neither to be too blunt, nor to digress, I think that the Grokster issue is moot from a legal point of view. The law is shaped by the long-term interests of those who wield the most significant influence in a state. Since there are so many people who make the --perhaps irresponsible-- choice of pirating today at the whatever future cost, there is little long-term support for serious legislation in the direction of limiting piracy.

The music and movie industries should probably move in two directions: lowering the costs under those of the pirate content (i.e.: below market price of conventional media) and adding hard-to-reproduce value, such as nicer packaging, better post-purchase services etc.

The only way the law can strike a balance between conflicting interests on this matter is to prescribe de collection of a blanket tax, like that for the UK public TV-station. But then again, who pays for public television? It would be a purely cosmetic solution.

People will always try to defeat any copy protection scheme, but being hacked should not also expose a company to copyright liability, so what is a good faith protection effort? That is the kind of thing courts decide every day, and is what they are for.

The existance of determined file-sharers (who popularized de-centralized peer networks like Gnutella in response to legal attacks on Napster's central repository model) is strong evidence of an under-represented popular interest in free access. A crackdown on current systems will likely cause them to morph and re-appear offshore, forcing another round of litigation.

When television was first invented, Movie studios bemoaned the loss of revenues at theatres. They eventually responded by spending to make movies more of an experience. Technicolor was invented, wide-screen formats like Cinemascope and Cinerama were born, movie budgets were increased, etc... etc...

Why protect the rights of non-innovative status quo players in an industry at the expense of innovation in technology. If digital file-sharing increases ease of access to information and entertainment, then perhaps it is a greater good than George Lucas' profit margin. Perhaps it is appropriate and good that innovation should pressure adjacent industries into responsive innovations or shake them from slumber.

People who worry about payments to artists would do well to consider two things, 1. the percentage of each dollar spent that actually reaches the struggling artist, and 2. the quality of the supposed "art" that is being produced under the current mega-studio dominated system. There are many people who think that the music and film industries are sorely in need of reform in terms of both equity and quality.

Has the American-Idol hit machine produced better songs than the wandering folk artists playing tunes for weed and world peace in the 70's? If an industry is not producing art that could be deemed worthy of patronage absent artifical regulatory props, then people supporting copyright aren't really supporting art, they are supporting vested property rights in the exploitation of commodified "art".

The middle way is the solution I have favored ever since the Metallica/Napster litigation. Every .mp3 file has a field in its id3 tag for identifying whether it is copyrighted. It would be easy for peer-to-peer networks to scan this field and omit any files identifying themselves as copyrighted from the sharing space. True, that would not prevent people who rip recordings to .mp3 format from lying about whether they are copyrighted. But it would allow makers of peer-to-peer software to say that they anticipated the risk the software could be used for infringing purposes and took precautions designed to decrease that risk.

On the heels of the discussion about eminent domain, one wonders whether California would be justified in exercising eminent domain over copyrighted works if it resulted in larger state tax revenues. Given that the annual revenue of the consumer electronics industry, driven in part by legally-questionable sharing and watching of copyrighted content, dwarfs the annual revenue of the music and film industry, it is possible that an electronics industry driven by legal sharing and watching of content would more than compensate for any lost tax revenue from the content industry itself.

"Anything placed in the public domain becomes fair game." This case is just another case of corporate profit hunting based on the "Deep Pockets Theory". Instead of going after the actual actor, the industry is going after the facilitator with the money.

Perhaps, if the industry took better care of its products through security (such as encryption) there wouldn't be this problem. The solution may lie in encrypting the products, then selling a product that allows the user to translate the product into a usable form. This way the Industry gets its royalties irregardless of the source. The problem then becomes have we created an "encryption arms race"?

Ahh..., the joys of human ingenuity and the desire to get something for nothing.

I'd concur with Corey, on Posner's cost-benefit "middle way" approach being an obviously good one for the judiciary due to their experience in balancing costs, benefits, rights, etc. (taken roughly, I presume, from Posner's opinion in the Aimster case a few years back, which had similar reasoning and was the most cogent of the "file sharing cases" decided in that period). Reasonable steps in public and clearly cost-effectively proveable to a court would establish that Grokster and Co. were not interested in copyright infringement in any way, and had a genuine business model to pursue. Of course, the upshot of this is that Congress could have inserted this provision into Title 17 years ago and given some basis for the Court to reach the "middle way" -- but alas, Congress cannot move much, especially when it really needs to these days.

Interestingly, this is what the new SnoCap software development kit (SDK) purports to do, by allowing P2P companies to "legitimize" their networks by adding a package to their software that can sort through and identify songs that are copyrighted and songs that are not. I do wonder how successful they will be, but their system would fix a lot of these problems without keeping out noninfringing uses of P2P -- thus spoiling the argument that we'd be clamping down on innovation.

This "cost effective" nonsense is inapposite when applied to much of P2P software (MIRC, bit torrent, etc) which is made by individuals, not corporations, and without a mindset on profit.

Moreover, VA Law, you ignore the unequal impact of instituting such policies. It is the individual programmer and start-up companies which will be disproportionately effected because they are unlikely to easily absorb the additional litigation and development costs. If one can be sued for providing free-of-charge P2P software, then one simply won't bother. This sort of policy is anti-competitive and anti-innovation.

Palooka - I happen to agree with you with respect to individuals who program P2P software, that the "'cost effective' nonsense" as you put it doesn't apply in the SAME way. However, we're considering the more narrow case of software companies that make money by advertising (if I recall) over the P2P software. As for a start-up company that can easily attempt some filtering software tied to an SDK or otherwise (such as SnoCap) that would prevent illegal trading but permit legal trading, then that is a reasonable thing for the law to force.

I don't worry about being anti-innovation under this test because programmers who like the idea will still try to create P2P software that will trade noninfringing software, text, music, movies, etc. but that complies with the "reasonable steps" test. Remember that the "innovation" benefit to society comes from the new technology's ability to share NON-infringing data between users; the infringing trade doesn't create a net benefit for society because copyright owners lose a substantial amount of protection even as consumers gain very effective access to a digital black market (which is what most P2P networks work as, let's face it).

As for the case of programs that have no identifiable author or no company managing them, I don't think they fall under this test because they have no control over the free P2P client software they distribute or interact with them (like showing ads). We're concerned with contributory infringement, yes; but we're more concerned with companies that PROFIT from contributory infringement, especially when they don't take any steps to prevent the infringement and indirectly benefit from said high levels of infringement (via ad revenue). We can't do much about the anonymous programmer who writes a gnutella-style network/client and distributes it -- but he's not profiting from it.

Two points:

1) It is interesting that the court accomplished what a minority of legislators tried to with the failed "Inducement Act." Looking at comparitive institutional analysis the court perhaps should have waited for congress to act and then rule on its Constitutionality.

2) It would be interesting to see if the same reasoning would apply to gun manufacturers who produce and market guns with killing force, concealability, etc., e.g Mac-10's and Tec-9's.

"We're concerned with contributory infringement, yes; but we're more concerned with companies that PROFIT from contributory infringement, especially when they don't take any steps to prevent the infringement and indirectly benefit from said high levels of infringement (via ad revenue)."

Didn't Sony profit from the infringement that occurred with their Betamax machine? Yes, they did. VA Law, are you arguing that the Betamax case was wrongly decided or are you arguing that their is something different about Grokster? Why what was OK for Sony is not OK for Grokster? Sony didn't take any steps to prevent infringment with their Betamax machine (striking the fast forward function is one example of what they COULD have done).

Again, I go back to the similarity with VCR (and today DVR) technologies. They are bought for so-called "time-shifting" but they are probably just as often bought for avoding commercials and for archiving, both of which fall outside of the "fair use" doctrine.

"I don't worry about being anti-innovation under this test because programmers who like the idea will still try to create P2P software that will trade noninfringing software, text, music, movies, etc. but that complies with the "reasonable steps" test."

Sophistry ALERT. OK, you're telling me that the chance of getting sued for FREE SOFTWARE is not going to drastically reduce the willingness of programmers to write these programs? If you're going to argue it's worth the tradeoff, fine. But don't pretend programmers are going to risk financial ruin for something they are providing for free.

Anybody who is even remotely familiar with software knows that the most innovation comes from precisely these corners of the programming world. But, hey, let's whore our selves to the RIAA/MPAA, even though it's not even clear if they're losing money in the first place.

"It would be interesting to see if the same reasoning would apply to gun manufacturers who produce and market guns with killing force, concealability, etc., e.g Mac-10's and Tec-9's."

Excellent point. At first I thought it wasn't an apt analogy. But it is! Just as it is technologically feasible to protect copyrighted works from infringement, it is also technologically feasible for weapons to only fire for their registered owner (I think there are fingerprint scanners or something like that which accomplisht his task).

Ahhh, but the solution must be "cost effective." I'd like to hear the argument--I know it's out there somewhere--that the as of yet undetermined losses of the entertainment industry are more of a priority than the tens of thousands who die from firearms in this country every year.

This sort of policy is more of a slipperly slope than many realize, I am afraid.

The issue is "contributory infringement" which applies to only copyright and perhaps trademark. The gun analogy lies outside of this limitation.

Besides, as the NRA has continually pointed out; "guns don't kill people, people kill people". So once again we're back to the importance of the "bad actor" and their actions. Unless of course we want to change the basis of Law and include any and all facilitators. "Hey! you're resposible and liable because you didn't do anything about it!" That's right, "Hang em all and let God sort em out." Judge Bean would've loved that. It's really all about good causal analysis, legal principle, and public policy.

"Unless of course we want to change the basis of Law and include any and all facilitators."

Nah, because we already have this nice thing called Product Liability, which is useful to force manufacturers of dangerous products to internalize the costs of accidents or diseases they cause. And guns cause lots of unintended accidents and death, no matter what the catchy NRA slogans say.

Asbestos doesn't kill people! Breathing asbestos kills people!

But I agree, its got nothing to do with copyright infringement.

You've probably read Tim Wu's "Miss Manners' School of Jurisprudence" on Slate: http://slate.msn.com/id/2121410/entry/2121673/

There are no tech solutions to copyright that can't be overcome. The only legal question, apparently, is did the programmer at least make an honest attempt? If you try to explain to a "pre-computer age" judge that it's futile and a waste of energy to even try, then you lose because you aren't being nice.

I support the music industry's campaign to sue individual infringers. They are stealing music, no question about it. But going after programmers gets us into this weird legal swamp where justice depends on a judge's mood that day. We need clear rules or no rules, but not arbitrary decisions.

"I support the music industry's campaign to sue individual infringers."

There is a solution that worked well in the drug war... NOT. What should we do, put them in prison? Bankrupt them and ruin their lives?
Sue a college student and an award of attorney fees alone will do that. So everyone settles for a predefined fine, and now you've got a business interest using the civil courts to write a defacto criminal misdemeanor statute. I thought most people were against legislation by the judiciary?

With so many people downloading files, it is possible that there is no majority for the proposition that "stealing" RIAA members profits is wrong. Certainly there are many who, even if they are against copying, are also against public beatings of randomly selected kids. If there is no majority norm against copyright infringement, then you can't sue enough people to create one, and you can't create one through vengeance either.

"The gun analogy lies outside of this limitation."

No, it doesn't. Since when is property more important than life? I love it when people propose a legal rule and then pretend that the principle cannot be applied in different contexts. I think they're confusing the judiciary for the legislature. Now, if the legislature adopted the "middle way" Judge Posner proposed, then of course it would be a different situation. I thought what was under discussion was a judicially imposed "middle way." And in that case, I see no reason to limit the middle way to copyrights Why? What good reason is there to differentiate between copyright infringement and murder (or the tort of wronful death or whatever).

"I support the music industry's campaign to sue individual infringers. They are stealing music, no question about it."

Is reading Shakespear "stealing" Shakespear? At what point does "stealing" become OK? And does the current copyright term of life+70 years have any economic justification? Who's "stealing" from whom?

Moreover, as Becker addresses, it is unclear whether p2p copyright infringement actually hurts the entertainment industry. How you could call something which is potentially neutral or positive to the industry "stealing" is beyond me. At best, it is an open question.

The concept of contributory infringement aims to minimize the enforcement costs borne by victims (copyright owners) by targeting third parties (facilitators of infringement) not explicitly defined in the law.

It suffers from two grave faults:

Firstly, it fails to consider the obvious solution, shifting all (or most) costs to the wrongdoers defined in the law, copyright infringers. If the plaintiff may as a matter of course recover reasonable attorney's fees, after winning in court and proving that he attempted to arrange a settlement out of court, in most cases the full cost will indeed be borne by infringers, no matter if a dozen or a thousand have to be sued. This is not to say I support a law that could be used to bankrupt poor file-sharing students - maybe it should be curtailed, e.g. limiting per person liability - but most definitely it should not be used to bankrupt companies not explicitly defined as wrongdoers by the law.

This leads to the second point, the failure to consider the long-term dangers inherent in allowing courts to target third parties, which thus gives the courts the de facto control over the meaning of the law. It weakens the power of the legislature and concentrates it in the hands of judges using a loose interpretation of the law. "Loose interpretation" of statutes is a travesty: it means that unelected and largely non-removable officials gain control at the expense of elected and revocable ones (juries are not much help here either). This is a case of lengthening of feedback loops between the state and the citizenry, since the public has a much more tenuous hold over the behavior of courts than over legislative bodies ,as imperfect as they are. Thus judicial activism becomes the order of the day, leading to outrages that cannot be easily reversed in the next election.

Taken together, the above considerations imply there is no economic justification to contributory infringement in copyright law, and the long-term effects of using this doctrine may be pernicious, leading to inefficiencies in the functioning of the political system.

Let's cut to the heart of the matter. Do we want it to be cheap and easy to copy stuff? I think the answer is clearly yes. So what sense does it make for courts to punish people for making a better copier?

Posner seems to start from the premise that we must apply the theory of contributory infringement to something (otherwise it would be useless! And we can't have a useless legal theory, can we?) A better starting point would be to question whether the concept of contributory infringement has any practical application.

I rather agree with Dan's comment. It would be one thing if Grokster et al. had been sued for Conspiracy to commit infringement, or even RICO with infringement predicates.

Then there would be familiar principles of scienter and causation on which the analysis could latch.

The concept of "contributory infringement" seems to me like a way of importing concepts of accomplice and facilitation liability into Copyright law, while jettisoning the limitations imposed on such concepts by centuries of experience with the common law. This seems to, as it did the 9th Circuit and, I think, the Supreme Court, leave adjudicators and potential innovators fundamentally adrift, without guidance or any ability to verify the legality of contemplated actions to a reasonable degree of certainty, as well as abandoning any semblance of balance for the needs of the inventors of new technology.

At the end of the day, there are two and only two differences between Grokster and vendors of blank audio cassette tapes:

Grokster is a vastly more powerful tool for the advancement of free speech rights and the avoidance of government, or private, censorship.

And the cassette tape vendors pretended they didn't know what the tapes were being used for.

It is hard to imagine that there is any commercial profit that is worth more than the freedom to trasmit information. The recording industry will have to find its own business model to adapt to this new world. Artists will continue to create. This may have a negative imact on one group: Big Budget Entertainment. Potential profits for the wealthiest entertainers will decrease first. The smaller players will have as much face time as expensive advertisements become less useful. The entertainment world may end up producing higher quality content after all. The gains that the entertainment industry realizes from the increased rate of communication on the internet has to also be considered - there is more exposure than ever possible through multiple chanels. Trying to stop file sharing is analogous to preventing photocopying - the difference is the ease and rate of transmission.

While I would agree that it is better to require copyright owners to use technological measures to protect their content, the sad fact is that technological protection is always ineffective, by the nature of the product. If one can listen to a recording one can copy it. In the case of digital material, once the genie of copying, or of a copy, is out of the bottle it cannot be put back.

Instead, I would posit that it is preferable to eliminate contributory infringement, and place the onus on copyright owners to solve the problem of inducing compliance in consumers, such as effective post-facto micropayment and mass-licensing systems.

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