I don't often agree with the Wall Street Journal editorial page, but they seem to have gotten this one 100% right. When you strip away all the glitz of the technology and remove the emotionally laden words such as "theft" and "piracy" the core of the problem is what do you do when the time-honored and respected act of two people sharing information can now include making perfect copies of a creative work?
The Wall Street Journal
EDITORIAL BOARD
Copyfight
By JASON L. RILEY
November 26, 2005; Page A10
It's been six years since the entertainment industry loosed its lawyers on the makers of Internet file-sharing software, and two years since the industry began suing the people who use it. By and large, it's winning these legal battles -- including a court-ordered shutdown of Napster in 2001 and a 9-0 Supreme Court ruling against Grokster in June. But that doesn't mean it's winning the war.
In fact, Americans continue to download music and movies using these so-called "peer-to-peer," or P2P, networks in record numbers. Through its trade association, the Recording Industry Association of America (RIAA), the music industry has sued more than 15,000 people in the past two years alone. Yet over that same period, traffic on file-sharing networks doubled, according to Big Champagne, a media company that measures P2P activity. Halfway through this year, volume had climbed to nearly nine million downloads, a new high and a 20% increase over last year.
Those numbers would seem to validate the findings of a 2004 paper on file-sharing trends by researchers at UC San Diego and UC Riverside. Using empirical data, it concluded that between 2002 and 2004, "P2P activity has not diminished. On the contrary, P2P traffic represents a significant amount of Internet traffic and is likely to continue to grow in the future, RIAA behavior notwithstanding."
The industry has every right to continue this behavior; downloading the new Harry Potter movie or Black Eyed Peas CD tracks without paying for them should satisfy any definition of intellectual-property theft. The more interesting question is whether litigation is the best long-term strategy for combating digital piracy. How viable is a business model based on suing your customers, especially when the lawsuits appear to be having no deterrent effect?
It's too bad, but history shows that the entertainment industry is much more inclined to fight new technologies than embrace them. Songwriters tried to sue the player piano out of existence a century ago. Vaudeville performers sued Guglielmo Marconi for inventing the radio. Disney and Universal sued Sony for making the Betamax VCR. And cable entrepreneurs over the years have been dragged into court by everyone from television broadcasters to the Motion Picture Association of America. If music and movie moguls had their druthers, they would have monopoly control over any device or platform capable of reproducing sound or pictures.
Which is to say that we can expect this litigious war against the Web to continue for now. Content is king, and content providers fear disruptive new technologies that could pose a threat to the existing order. With Grokster, the plaintiffs were hoping the court would overturn its landmark 1984 Betamax decision, which held that VCRs did not violate copyright law because the technology was "capable of substantial noninfringing uses." But rather than addressing this core issue of whether P2P networks meet the Betamax standard, the court chose to focus its ruling on Grokster's business plan. Because the company was actively promoting a product for infringing uses, Grokster was found liable.
"It's a bit disappointing that we didn't get any clarity about the Betamax test here," says Cindy Cohn of the Electronic Frontier Foundation, which represented StreamCast Networks, a Grokster co-defendant and fellow file-sharing software company. "That's the more interesting and harder question that was put to the court. When can you be liable based on what your customers do with the technology?"
Companies may yet come up with more legitimate file-sharing models and better controls, so it's better that the court didn't rule P2P networks illegal as such. But by largely ducking this debate, the Grokster decision only adds legal uncertainty to the technology sector and could undercut innovation and investment in new products. There's a reason companies like Intel and every major Internet service provider sided with Grokster. They are worried about a situation in which lawyers replace engineers on design teams. And smaller companies who want to innovate, but find themselves in some grey area where customers could use their product for copyright infringement, better make sure they have a huge war chest for litigation costs before proceeding.
The lesson music and movie lobbyists take from their Grokster victory is to stay the course. But Tim Lee, a technology and intellectual-property expert at the Show Me Institute in St. Louis, says that suing tech companies and music fans ultimately is a fool's errand. "I don't think they [the entertainment industry executives] fully grasp the size of the challenge they face," he says. "It will be an arms race. P2P networks will improve. The recording industry will find a new way to catch people, and P2P networks will find better ways to avoid getting caught."
The fundamental problem, says Mr. Lee, is that the Internet itself is a peer-to-peer network. If two willing people want to exchange files, you're never going to be able to limit their ability to do so in a nation of 290 million people. Besides, you wouldn't have time to sue them all even if you could catch them.
The copyright laws we live by today were written to go after commercial piracy. They are based on the idea that you can use control of the ability to make copies as a basis on which to remunerate content providers. No one envisioned a time when we would all be in possession of computers that can make copies as freely and easily as we now can.
Moreover, the copyright system is based on moral precepts that most people today accept. But will future generations raised with P2P technologies see piracy differently? "If I were a recording industry executive," says Mr. Lee, "I would be looking very hard at business models that embrace P2P technology, not looking to lawyers to thwart it."
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