Magazine article Information Today

The Future of P2P

Magazine article Information Today

The Future of P2P

Article excerpt

For some law teachers, the highlight of the summer season is the end of the U.S. Supreme Court term in late June. This year was particularly entertaining with the speculation about retirements. But the decisions released by the court at the end of the session are often the most compelling ones of the year. This year was no exception: On the last day of the session, one of the most significant decisions to impact copyright law and the information industry--MGM v. Grokster--was released.

The Grokster case is the latest effort by major media copyright holders to address the problem of illegal downloading of copyrighted materials through peer-to-peer (P2P) file-sharing networks. Earlier lawsuits had shut down the original Napster file-sharing network in 2002.

From Napster to Grokster

Napster was vulnerable because its centralized servers facilitated illegal downloading. The true P2P structure of Grokster and Kazan eliminated the centralized server so that these companies never actively participated in the file-transfer process. They only provided software that could be used by other people; they stepped away from direct knowledge about the actions of those people. As a result, illegal downloading of copyrighted material grew dramatically and expanded beyond music to software, movies, and other media.

Copyright holders in the music, movie, and software industries pursued several avenues of attack. The most positive response has been the success of legal downloading mechanisms such as the popular Apple iTunes and the reconstituted Napster. The number of songs legally downloaded has tripled in the past year. The second avenue has been the widely publicized lawsuits against individual downloaders (more than 12,000 since 2003). While this has not stopped all illegal downloading, it has slowed its advance.

But individual lawsuits remain expensive, with settlements averaging $3,000 each. So the third avenue was the Grokster lawsuit, which targets downloading at its source--software. MGM and the other media plaintiffs claimed that the file-sharing software and networks were established with the objective of encouraging free downloading of copyrighted content. Their marketing and income stream were based on those objectives. Legally, it was claimed, they were contributorily liable for the infringement of their users, even if they did not directly do the infringing.

Media, Information, and Technology Industry Interest

The media, information, and technology industries watched the Grokster case carefully. The media's interest was obvious: This was a new and potentially fatal tool to attack illegal downloading at its source. The technology industry was very concerned about inhibiting new development. For 20 years, the technology industry relied on case law established in the early days of VCRs. This case law allowed technologies to be created. It also permitted copyright infringement, as long as the technology could also be used for non-infringing purposes. If that rule changed, any technological advance that could be used for copyright-infringing purposes could potentially subject the developer to liability.

For the information industry, the concern was equally important, but less direct. The attraction to P2P was positive: Its appeal was that it was cheap (often free) and fast. One item of content quickly becomes millions of items of content at no cost to the distributor. This concept, known as viral distribution, is an attractive alternative to traditional means of content distribution, particularly for nonprofit and open source content providers. …

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