Monday, June 27, 2005

Grokster

9-0 majority opinion, though not per curiam as I came to suspect it might be. Souter wrote the majority, and Ginsburg and Breyer wrote concurrences about Sony. Lots of analysis over at Picker MobBlog; I think Lichtman and Lior have it right. More tonight, probably, and on Brand X, too.

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.

Wednesday, June 22, 2005

Note the Washington Post: Rehnquist is not Retired/Dead Yet

Funny thing, RSS news feeds. Ocassionally, a newspaper or blogger will post something, only to quickly remove or edit it. Often the feed remains, and the results can be interesting. Case in point: check out what my Washington Post feed via the brilliant Safari RSS gave me this afternoon:

**Chief Justice Rehnquist Retires/Dies

Charles Lane in washingtonpost.com - US government, national security, science and national news and headlines.

Today, 02:02 PM

When a grade-school teacher asked young William Hubbs RehnquistÖ what he was going to do when he grew up, the loyal son of anti-New Deal parents did not hesitate: "I'm going to change the government," he said. Read more…**

**Key Rehnquist Decisions
washingtonpost.com in washingtonpost.com - US government, national security, science and national news and headlines.

Today, 01:53 PM

May 27, 2003 Nevada v. Hibbs Rehnquist rules that state governments have to obey the Family and Medical Leave Act of 1993. * FindLaw Case Documents * Post Article: Justices Extend Family Act's Reach * Post Editorial: States' Rights Muddle &rvar29=April 1, 2003 Gratz v. Bollinger, University**


**Rehnquist: A Justice's Journey

Today, 02:10 PM

William H. Rehnquist was born Oct. 1, 1924, in Milwaukee to Margery and William Rehnquist. His father was a paper salesman. Read more…**

**Key Rehnquist Decisions

washingtonpost.com in washingtonpost.com - US government, national security, science and national news and headlines.

Today, 03:21 PM

Known as a conservative, Rehnquist was particularly influence in the areas of federalism and states' rights. Read more…**

Reminds me of a film that stands as a glaring omission from the silly AFI list:

MORTICIAN: Bring out your dead!
Bring out your dead!
[clang] Bring out your dead!
[clang] Bring out your dead!
[clang] Bring out your dead!
[clang] Bring out your dead!
CUSTOMER: Here's one -- nine pence.
DEAD PERSON: I'm not dead!
MORTICIAN: What?
CUSTOMER: Nothing -- here's your nine pence.
DEAD PERSON: I'm not dead!
MORTICIAN: Here -- he says he's not dead!
CUSTOMER: Yes, he is.
DEAD PERSON: I'm not!
MORTICIAN: He isn't.
CUSTOMER: Well, he will be soon, he's very ill.
DEAD PERSON: I'm getting better!
CUSTOMER: No, you're not -- you'll be stone dead in a moment.
MORTICIAN: Oh, I can't take him like that -- it's against
regulations.
DEAD PERSON: I don't want to go on the cart!
CUSTOMER: Oh, don't be such a baby.
MORTICIAN: I can't take him...
DEAD PERSON: I feel fine!
CUSTOMER: Oh, do us a favor...
MORTICIAN: I can't.
CUSTOMER: Well, can you hang around a couple of minutes? He
won't be long.
MORTICIAN: Naaah, I got to go on to Robinson's -- they've lost
nine today.
CUSTOMER: Well, when is your next round?
MORTICIAN: Thursday.
DEAD PERSON: I think I'll go for a walk.
CUSTOMER: You're not fooling anyone y'know. Look, isn't there
something you can do?
DEAD PERSON: I feel happy... I feel happy.
[whop]
CUSTOMER: Ah, thanks very much.
MORTICIAN: Not at all. See you on Thursday.
CUSTOMER: Right.
[clop clop]
MORTICIAN: Who's that then?
CUSTOMER: I don't know.
MORTICIAN: Must be a king.
CUSTOMER: Why?
MORTICIAN: He hasn't got shit all over him.

Thursday, June 16, 2005

Raising the Price of Fame

I may not be posting much, but I do take requests. Alas, I think Brian got the thrust of Norman Augustine's opinion piece absolutely, totally 100 percent wrong. My take on his piece is that he's absolutely not making any sort of argument for limiting executive pay scales at all. Instead, he seems to be mocking what Congress has done, limiting companies' deduction for executive pay to $1 million, unless performance-based, and further limiting the compensation of chief executives of, say, defense contractors, like maybe Lockheed Martin, of which Mr. Augustine was CEO, to $473,318.

Now, the main problem with this "he's mocking Congress" idea is that the article appeared in the NYT; had it been in the WSJ, I'd be perfectly fine leaving my analysis at that. But the cause of CEO of defense contractors' pay wouldn't seem to be the sort of thing that would normally take up the valuable op-ed page of the NYT. So, why'd the NYT publish it then? Well, they might just have taken him at face value, as I think Brian did. Alternatively, maybe they're trying to branch out, and open their page to other viewpoints. Or maybe there's something else I'm not thinking of, since I'm not feeling very clever right now.

UPDATE: Going back and reading this post, I probably come off a lot harsher toward Brian than I intended. Really, no malice was intended at all. Really, I just laughed when I was reading the op-ed, and was in that mood of jocularity when I wrote the post, though I guess maybe it didn't come across very well. N.B. I haven't heard anything from Brian about this, so I guess this is mostly just a record correction.

Raise the Price of Fame?

The premise of Norman Augustine's opinion piece in the NY Times leaves me befuddled. Here's a snippet:

**The occasional good chief executive aside, how could anyone defend the extravagant compensation of Bernard J. Ebbers (who pocketed more than $400 million in salary and company-secured loans before WorldCom crashed); Kenneth L. Lay (who received more than $100 million in compensation the year Enron went belly up); or Richard M. Scrushy of HealthSouth ($125 million over five years).

Assuming that having Congress seek to influence pay scales in the private sector is good public policy, we must ask ourselves - even recognizing that chief executives are now about as popular as Attorney General Eliot Spitzer at a Business Roundtable picnic - why focus only on chief executives?**

And what public policy, exactly, does influencing private pay scales support? Augustine's public policy seems like a substantive unconscionability or "shocks the conscience" approach to compensation. If it's "just too much," we have to do something about it.

Why?

I want someone to come up with the best argument they can. "It's just too high" isn't an argument. Is it that corporate boards don't really care about shareholders, and just want to enrich their friends in management? Meanwhile, shareholders are too lacking in influence or lazy to do anything about it?

I want to know what makes a former CEO like Augustine think this way. Tom, maybe you know. It's completely beyond me.

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