Click Here For Inducement Disclaimers
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Seen any good online file-sharing technology lately?
If you searched on Google with keywords such as "P2P" or "file-sharing" -- or on any of the search engines in the past few days -- you had no trouble finding sites and software that help you steal copyrighted content.
Right there in the paid click section of Google's results were links to sites that, wink-wink, can help you steal copyrighted content. Oops. Did I just induce you to go infringe on copyrighted content? Seriously, that's not my intent.
In light of Monday's Supreme Court ruling that said peer-to-peer (P2P) technology developers such as Grokster and StreamCast, whose business models are based on helping people steal copyrighted content, can be held liable for inducing copyright, plenty of companies and innovators are thinking that "induce" question over.
After all, if I click on that paid ad in Google's search results that takes me to a site that can help me steal, Google collects ad dollars from that click. If it knows those sites exist to help people steal, is Google inducing copyright infringement?
You can be sure Google's lawyers, and any other player whose dollars might lead to the use of copyright-infringing behavior, are pondering their liability.
Already, Google has removed videos that users claimed were being offered for free via its video search service, currently in beta. Although it said in a statement regarding the video issue that it respects copyright and takes it seriously, the company's official comment to internetnews.com about whether featuring paid ads for sites with questionable business models is "no comment."
But behind the scenes, there is no question that Google and its lawyers are huddling over the high court's language in the Grokster ruling and whether its paid-search model might need some tweaking.
Among the key passages in the unanimous decision, written by Justice David Souter stated in the majority opinion: "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement."
So a portion of Hollywood's case against the two companies heads back to a lower court for trial, with the weight of the high court's ruling behind them. It's not so much the technology that was at issue, but the behavior of companies with that technology where the court found fault.
The fed crackdown on sites that specialize in online piracy notwithstanding, plenty of major companies are pulling in advertising dollars or revenue of some sort in return for directing people to sites or software that help them swipe copyrighted materials.
Will the high court's ruling, which essentially upheld the Sony v. Betamax case law and remained neutral about the technology -- only hitting those who use it for illegal purposes -- protect companies whose products can be used for both good and bad behavior?
So what kind of behavior is ok?
Get ready for a torrent of lawsuits to help add clarity to define infringement-inducing behavior. Hollywood alone will see to that while it warms to the idea of online distribution of content.
And get ready for another torrent of innovation that helps people distribute content -- legally or otherwise. The big technology wheel in the sky will keep on turning.
But technology innovators looking for venture dollars might feel a door hitting their behinds all of a sudden. The best innovators may have to go underground in order to keep building out their ideas about digital media distribution systems.
Even folks like David Pakman, the COO of online music service eMusic, are a little worried about innovation now, as much as they cheered the ruling.
As president of Dimensional Associates, the parent company of eMusic and which specializes in investing in innovative digital media companies, he's not so sure where to put his investment dollars since Monday's ruling. For him, the win for content providers, and companies that help distribute music legally, carries a mixed message.
It's good that the Supreme Court didn't say all services are patently liable for infringement of services. But it has him thinking: When am I liable as an innovator?
"We constantly look at new features that could have infringement uses," he told internetnews.com. "It's not clear what constitutes this sort of inducement" that the Supreme Court ruling talks about.
The court's opinion did make clear that the two companies in the case, Grokster and StreamCast, had knowledge that the technology promoted copyright infringement, and promoted the use of the technology for those purposes.
"But what if you don't promote [copyright infringement]?" Pakman added. "If I make a P2P product that advertises itself as the best place to download works in the public domain, is that illegal?" After all, it can also be used to swipe the copyrighted stuff too.
Maybe it's a case of having to show some best efforts of adding filters, or not trying to blatantly profit from helping people steal. But again, a person looking to steal music online can find plenty of sites in Google's paid search section right now.
"Even if 98 percent of users use the software to download content legally, or that is not copyright-protected, do I now have to install some filtering technology, which the ruling alluded to? Maybe I have to now show some sort of best efforts" at avoiding the marketing of a product for explicit infringing uses, Pakman said.
"This won't chill the innovator. But it chills the capital behind the innovator. If a technology company came to us with promising commercial uses for their product, that's a less interesting investment today, and certainly less interesting if the Supreme Court had protected the technology, despite the behavior of their users," he added. You're not going to put your capital at risk if there's a high likelihood of being sued and losing."
But on the flip side, he's glad the ruling could help spur legal services for distributing music and content online.
Pakman pointed to the Google example, which serves up paid search results of sites that can ultimately help you infringe. Take the EZMP3s.com site. It includes a disclaimer that says: "Sharing is not illegal as long as you obey all relevant copyright laws. Sharing copyrighted material, without permission to do so, is illegal. Purchasing a membership in EZMP3s.com does not give you license to download or upload copyrighted material. EZMP3s.com implores you to respect all copyright laws."
Will that meet the standard the Supreme Court has now set for companies to avoid inducing you to steal content?
The reality is we'll have to wait until even more lawsuits start to fly alleging bad inducement behavior and we have more case law to sift through.
On this point at least, the content industry and digital distribution innovators can at least agree.
Erin Joyce is executive editor of internetnews.com.