FILE SHARING
March 29, 2005

The Supreme Court Tuesday heard arguments in a copyright case brought against file-sharing networks by members of the entertainment industry. Media Correspondent Terence Smith looks at the ongoing debate over file sharing on the Internet. Then, The Chicago Tribune's Jan Crawford Greenburg discusses the arguments heard at the High Court. The NewsHour Media Unit is funded by grants from the Pew Charitable Trusts and the John S. and James L. Knight Foundation.

 

Online NewsHour Special Reports: Media Watch Copyrighting in the Digital Age Supreme Court Watch March 7, 2005: Terence Smith takes a look at the entertainment industry's case against file-sharing services. Jan. 21, 2004: Update: The Recording Industry Files 532 'John Doe' File Sharing Lawsuits Dec. 19, 2003: Update: Appeals Court Rejects Industry Attempt to Identify Music Downloaders April 24, 2003: The Recording Industry Association of America sued four students earlier this month, alleging they operated music-sharing Web sites. Browse the NewsHour's coverage of the law and media   News for Students: Digital Copyright Fight 05.01.03     Supreme Court Electronic Frontier Foundation StreamCast Networks	TERENCE SMITH: The entertainment industry is suing the makers of software that allows computer users to find and download files from each other's computers, not just Web sites. The question for the Supreme Court: How to protect copyrights, without stifling the innovation that has produced new technologies such as MP3 players and Tivo? Michael Weiss is CEO of StreamCast Networks, one of the defendants in the case. His company makes Morpheus "peer-to-peer," or person to person, software that makes it possible for computer users to share files. He says the potential uses for his product are staggering, assisting those who wish to trade anything from white papers and nursery rhymes to breaking news. MICHAEL WEISS: There are 60 million users of peer-to-peer software in America alone, over a hundred million worldwide. The amount of information and storage that are on those computers of over a hundred million users dwarfs anything that is available on the Web.
	Copyright law in a digital world
	TERENCE SMITH: But the entertainment industry -- including MGM, Paramount, Columbia Pictures, and others -- claims the main use of such peer-to-peer software has been to enable computer users to copy entertainment works for free, without permission. They say 13 billion music files were available for downloading last year, and 12 million movies are downloaded every month. Dan Glickman is president and CEO of the Motion Picture Association of America. He says six out of ten movies don't return their investment now, and if free downloading further cuts profit margins, movies and other creative works won't be made. DAN GLICKMAN: Piracy is really a dagger at the heart of the creative industries in this country. And if we don't try to stop it, it has the potential of dramatically reducing the amount of movies, music, books, software that are available to the public. BRIGHT EYES: (singing) I know that it is freezing but I think we have to walk... TERENCE SMITH: Some artists, such as Bright Eyes, have encouraged free downloading of songs to promote concert dates and merchandise sales. Online services that provide legal works for a fee are growing, but they are dwarfed by free, illegal downloads. ALISON KRAUSS: (singing) The smile on your face lets me know... TERENCE SMITH: And the plaintiffs say technology manufacturers should not be profiting from the illegal use of their software. The entertainment industry's last big battle with technology was in the 1980s, over the use of the videotape machine. The entertainment industry sued Sony over its Betamax, contending that consumers were using the new technology to illegally tape television shows. The Supreme Court ruled that since Sony was not doing the copying, the company could not be sued. Home video has since proved to be a boon for the entertainment industry. But the entertainment industry is arguing that the copyright law has not kept up with a digital world. MOVIE SCENE: Where are we going? TERENCE SMITH: The court is expected to decide the case later this year.
	A heated argument
	JEFFREY BROWN: And Jan Crawford Greenburg of the Chicago Tribune is still here with me. So, in this case the entertainment industry lost in the lower courts comes to the Supreme Court today for argument. Did it provoke a good one? JAN CRAWFORD GREENBURG: This was a terrific argument. It was very well-argued by all the lawyers involved in this case. The Justices were incredibly engaged. They just fired questions at the lawyers throughout the entire hour of argument. The courtroom was packed, people from all over the country on both sides of this issue. The movie business, the recording industry, the high-tech business filled the courtroom; a line had stretched out the door early this morning, people waiting to get in. This obviously is a very significant case. And the Justices obviously grasped what's really at stake during these arguments. JEFFREY BROWN: So did the big entertainment companies come in with the kinds of arguments that we just heard in Terry's piece? JAN CRAWFORD GREENBURG: Sure. They argued today, a lawyer for the entertainment industry, the movie studios, the recording industry, thousands and thousands of songwriters argued in court today that Grokster and StreamCast, these two file-sharing companies have built their business around copyright infringement. And the vast majority of people who use their software and services to get music and information and movies are stealing it -- I mean they're violating copyright and as a result these companies should be held liable. JEFFREY BROWN: Do they argue that Grokster and others know what's going on? I mean, they make the service available, but do these companies know that everyone is downloading it illegally? JAN CRAWFORD GREENBURG: Yes, they say they know absolutely what's going on and in effect have encouraged them to infringe on all these writers' and artists' copyrights. And so they say that the court must step in here and allow these companies to be held liable, or otherwise it will stifle creativity and really just discourage people from continuing to create.
	Balancing interests
	JEFFREY BROWN: So you said the judges were really up over this one and asked a lot of questions. What kind of questions to the companies? JAN CRAWFORD GREENBURG: Well, this obviously raises very difficult issues because there are concerns on both sides about stifling creation and balancing the interests of these copyright holders against inventors and creators who are trying to come up with new high-tech products. So the Justices in their questions got to the heart of how do you strike that balance? For example, in questions to the lawyer for the entertainment industry, Justice Breyer said, "well, what would you tell the inventor of the Xerox machine or the VCR or the iPod?" All of those technological devices, all of those inventions could have had other uses that would allow people to infringe copyrights. The Xerox machine, you can go in there and copy an entire book. How would you respond to somebody who is inventing those? Justice Souter also seemed very troubled about stifling technology and innovation and asked, "What about the guy in the garage who is thinking he's inventing the next computer." How would he ever know when people would start using his device to infringe copyright and suggested that that was just a very difficult test? JEFFREY BROWN: So they really played to this history of technology because it's always fascinating, you never know which one is going to win, which one is going to lose. So that was much on their mind? JAN CRAWFORD GREENBURG: Of course it was. And I would say at the end of the day, of course in this case, it was very difficult if not impossible to predict which way the court is going to go with these high stakes. They're trying to use laws and cases that came about before anyone had ever even envisioned that there would be something known as an Internet. The main case at issue that we heard in the setup piece was a case that came about in 1984, involved the VCR, which 20 years ago was obviously quite a technological innovation. So they're trying to impose some of these old cases and old laws on to this new technology. That's very difficult to do. Now, the United States stepped in, in this case and sided with the entertainment industry, the motion picture industry, although it didn't go quite as far. It argued today that Grokster and StreamCast have built their business around these copyright infringements and that they should not be allowed to do that. But they suggested, the lawyer for the United States today, Paul Clement, suggested that he would be happy if the court would just send this issue back to the lower courts for a trial to see if Grokster had actually encouraged the users to infringe copyright.
	A high-impact case
	JEFFREY BROWN: We should probably say that regardless of the outcome here, it remains illegal for individuals to download these copyrighted materials, right? JAN CRAWFORD GREENBURG: Sure. JEFFREY BROWN: That's not at issue here? JAN CRAWFORD GREENBURG: Sure. But, you know, it's very difficult to go after the millions of people who download billions of songs and movies and other information on a monthly basis. JEFFREY BROWN: And was that an argument? JAN CRAWFORD GREENBURG: No, that didn't come up today, but that's in the court papers. And so that's also why the recording industry and the movie industry are here. It's a lot easier and it's better public relations for them to go after Grokster and StreamCast than file lawsuits, as they have done, of course, against the college student who is sitting in her dorm room downloading a popular song. JEFFREY BROWN: And both sides played up the potential impact of a case like this on the future of the Internet and how we get information and what kind of content we get. JAN CRAWFORD GREENBURG: Well, sure. And certainly the lawyer for Grokster and StreamCast today argued that a ruling against his clients would stifle innovation; that you're going to allow copyright and copyright law to affect the development of new technologies and that that's a completely inappropriate way to try to impose copyright law in this case. And the people on that side have said that the important issue to them is, you know, not allowing Hollywood to determine how these new technologies are going to develop and to unfold. JEFFREY BROWN: Okay. Jan Crawford Greenburg, thanks again. JAN CRAWFORD GREENBURG: You're welcome.

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