On Tuesday, the Supreme Court heard arguments in MGM v. Grokster.

The Grokster case, for those who haven’t been following it, concerns the liability of distributors of P2P software. As we all know, there are legitimate uses for P2P software (think BitTorrent and distributing Linux ISOs, which are legally free and clear for distribution) and infringing uses (distributing MP3s of Dark Side of the Moon on a P2P network). The question is, whether a distributor should be held liable for infringing uses when there are substantial non-infringing uses as well.

The case is a test of the famous (or infamous, if you happen to be on the recording industry’s side of the fence) Betamax standard. (See the Electronic Frontier Foundation’s Betamax Case page for an excellent summary of Sony Corp. of America v. Universal City Studios.)

The ramifications of this case are huge: A loss for the Grokster could mean disaster for P2P filesharing systems across the board, as well as other technologies. If Grokster is liable for infringing uses, would the ProFTPD Team be liable when someone grabs a copy of Star Wars from a server running ProFTPD? Would Microsoft be liable when someone uses IE to download MP3s from websites? Since almost any file transfer software could be abused to infringe on copyrights, where would the line be drawn? A loss for Grokster could have a serious chilling effect for all sorts of software.

However, there’s been another interesting development in the case that no one was expecting. Timothy K. Armstrong was at the MGM v. Grokster hearing and caught MGM making a surprise concession in response to a question from Justice Antonin Scalia:
At least some of the Justices, Scalia in particular, seemed troubled by how an inventor would know, at the time of inventing, how its invention might be marketed in the future. How, some of the Justices asked MGM, could the inventors of the iPod (or the VCR, or the photocopier, or even the printing press) know whether they could go ahead with developing their invention? It surely would not be difficult for them to imagine that somebody might hit upon the idea of marketing their device as a tool for infringement.

MGM s answer to this was pretty unsatisfying. They said that at the time the iPod was invented, it was clear that there were many perfectly lawful uses for it, such as ripping one s own CD and storing it in the iPod. This was a very interesting point for them to make, not least because I would wager that there are a substantial number of people on MGM s side of the case who don t think that example is one bit legal. But they ve now conceded the contrary in open court, so if they actually win this case they ll be barred from challenging ripping in the future under the doctrine of judicial estoppel. In any event, though, MGM s iPod example did exactly what their proposed standard expressly doesn t do: it evaluated the legality of the invention based on the knowledge available to the inventor at the time, not from a post hoc perspective that asks how the invention is subsequently marketed or what business models later grow up around it.

Hat tip to Ernest Miller for pointing out Armstrong’s post. Miller also points out that, if it’s OK to rip MP3s to your iPod, shouldn’t it be legal to rip DVDs to another medium for personal use?

What about using DeCSS to watch DVDs on Linux or other platforms? It should be interesting to see MGM try to wriggle out of this, since I doubt that the company is going to champion any expansion of fair use.

From ZDNet