Sunday, June 26, 2005

Grokster Prediction

Making a prediction on Grokster could make me look really good tomorrow, or confirm my foolishness. But hey, my McCain Feingold guesses worked out ok, so I'll take the risk. Here's my Grokster guess:

I can see three primary consensus points for the Court: 1. Sony is either adaptive or irrelevant, leaving room for a more refined rule of law. 2. Actual inducement is a useful theory for copyright law, and ought to be applied independent of Sony as a theory of secondary liability. The case will be remanded for determination of this issue. 3. Innovators must not be stifled while their creations are in their infancy. This is true even if they aid copyright infringement to a significant degree, so long as the product has a capacity for non-infringing uses.

On the fringes are two issues that will likely receive some attention in the opinion, but may be glossed over for the sake of consensus. Both Justices Souter and Scalia made clear that Judge Posner had the better argument in the willful ignorance debate—turning a blind eye will not bar a contributory infringement claim. But it is far less likely that this theory will lead the court to impose the Chicago “affirmative duty” regime upon content creators. Not only did this theory receive virtually no attention at oral argument, but seems to be too large a departure from Sony.

Secondly, the Court may make some mention of the role Congress should ultimately play in how the law approaches copyright in the future. Justice Ginsburg’s “rebuttal” to the respondents’ congressional deference theory, that “the Court is now faced with two apparently conflicting decisions,” indicates that the Court sees a need to take a first crack at the problem for harmonization purposes. But it would be odd for the Court to ignore that the policy issues inherent in balancing corporate profits with incentives for innovation are primarily the province of the legislature.

Bringing all of these strands together, I see a real potential for court-wide consensus in Grokster. I envision an opinion that begins by placating Judges Stevens and Breyer. I believe the Court may posture the case as a vindication of Sony’s concerns for promoting innovation. Substantively, however, the Court will limit the “substantial noninfringing use” safe harbor to situations in which either: 1. the primary uses are noninfringing; or 2. the product is in its infancy, perhaps less than a few years old. If the product has been on the market for more than a year or two and the primary uses are infringing, an actual knowledge/willful ignorance regime will apply. Thus, the contributory infringement rule will be expanded beyond the Ninth Circuit’s view. The secondary liability discussion will not be framed as an “affirmative duty” rule, though it may lead to that result in practice where the defendant can maintain control over the product. Alternatively, a “taking steps to mitigate infringement” rule may be fashioned by the Court as a secondary liability defense, or as a way of limiting damages.

Cutting across the Sony discussion will be a new copyright inducement regime. This rule will be completely independent of the refined Sony rule. The inducement rule will enable a plaintiff to assert a valid claim of bad intent regardless of the maturity of the defendant’s product. This will provide some comfort to the Justices concerned about more Groksters; in practice, all firms will adapt to avoid being so notorious. As Justice Scalia put it, “the inducement point doesn’t get you very far.”

Applying the new rule to the facts of Grokster, the Court will vacate the Ninth Circuit’s opinion, and remand the case to the district court for determination of 1. the breakdown of infringing vs noninfringing uses; 2. assuming a finding of primarily infringing uses, Grokster’s knowledge/willful ignorance of infringement; 3. Grokster’s intent for inducement purposes.

Or, you know, they could just punt.

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