Grokster is Dead, Long Live Grokster!

Do you remember the Nestlé baby formula scandal? According to UNICEF, Nestlé has contributed to the deaths of over a million children worldwide. The facts are these: until 1977 Nestlé encouraged third-world mothers to switch from breastfeeding to formula. This went as far as giving mom free samples of product as she left the hospital with newborn in hand. Because Nestlé induced fear, uncertainty, and doubt about breastmilk safety, mom would feed her baby product instead of the true blue. This resulted in hundreds of thousands of babies superfluously dying from water borne illnesses. Or even worse, mom would lose the ability to breastfeed and, unable to afford more formula, junior would starve to death.

Of course Nestlé itself never killed a single baby. They merely induced mom down the garden path.

When thinking of the Nestlé case, what emotions come to mind? Horror, anger, and confusion? Why then the anti-SCOTUS sentiment surrounding the Grokster outcome:

• Slashdot reports with much doom and gloom that the Supreme Court has ruled unanimously against Grokster.
• Dan Gillmor calls it a sad day for "innovation, customer rights, and free speech."
• Donna Wentworth on Copyfight asks simply What Happened?
• National Public Radio host Steve Inskeep says that P2P makers can now be sued if their users violate copyright protection.
• Grokster Loss Sucks for Tech says Wired News, never at a loss for words.

Let me be the first to say I disagree. I think the Grokster ruling is a stunning victory for innovation, customer rights, and free speech. Instead of peering into the echo chamber, lets analyze the court ruling itself. According to Gillmor, the high court said that, "Grokster and other file-sharing companies can be sued if their products are designed for copyright infringement and don't have safeguards to protect copyrighted material." But does it really say that?

To quote the ruling itself on inducement:

The rule on inducement of infringement as developed in the early cases is no different today. Evidence of "active steps ... taken to encourage direct infringement," such as advertising an infringing use or instructing how to engage in an infringing use, show an affirmative intent that the product be used to infringe, and a showing that infringement was encouraged overcomes the law's reluctance to find liability when a defendant merely sells a commercial product suitable for some lawful use.

What this means is that simply making a product that can be used for infringement is not illegal. Even if the overwhelming majority of the people are using the product for infringement it is still not illegal. Grokster, the company, is only in the wrong because it marketed its product as being a tool specifically for infringement. Take note of how I say the company as opposed to the product. The Supreme Court of the United States has just ruled that P2P software is legal. Grokster — the product — is legal, but Grokster, the company, may be sued. I don't see how one could reasonably want a better decision than that.

Gillmor's second claim is that any products without safeguards against infringement are now illegal. Well the previous blockquote would seem to contradict that claim as well, but is there any more evidence in the ruling itself?

Although Grokster appears to have sent e-mails warning users about infringing content when it received threatening notice from the copyright holders, it never blocked anyone from continuing to use its software to share copyrighted files. StreamCast not only rejected another company's offer of help to monitor infringements, but blocked the Internet Protocol addresses of entities it believed were trying to engage in such monitoring on its networks

Certainly if they had said unambiguously that it is illegal for companies to not provide safeguards against violating copright, I would be very upset. However in this particular case Grokster was in the wrong, considering that they could have blocked users at no cost or significant effort to them. Other companies were willing to provide the service for free, but Grokster chose to refuse them because infringing users were its main customer base.

If you read Fred von Lohmann's Grokster Reader's Guide, it seems like this is the outcome he was hoping for. And in fact, in his news briefing afterward he was very positive about many aspects of the case. While disappointed that SCOTUS did not set a clear standard on what constituted inducement, he noted that betamax was not overturned and that Grokster had an excellent chance of winning its case in the lower courts. Who is Fred von Lohmann and why does his opinion matter? He is the lawyer from the EFF representing Grokster.

When Nestlé was contributing to the deaths of children to make a profit the world was horrified. But they weren't horrified because Nestlé made baby formula. Baby formula was a tool, and like most tools it can be used for both good and evil. So what made Nestlé's actions wrong wasn't the fact that they made the product, but rather that they promoted it as a healthier alternative to breastfeeding when nothing could have been further from the truth. And as we feel about Nestlé, we should also feel about Grokster. We must learn to separate noun from verb, corporate product from corporate action. Far from being a stinging defeat, we have just been handed a resounding victory. The Supreme Court has just ruled that P2P is legal, so sing it from the rooftops and savor the day.

Read the comments on this piece at Kuro5hin.