I offer yet more analysis of Grokster, in the spirit of angels dancing on the head of a pin, or perhaps impaling themselves on the point.

C.E. Petit Esq. of Urbana, Illinois offers an interesting take on the significance of the procedural stance of the Aimster and Grokster cases in his blawg of August 23. I confess to some curiousity as to what colleagues Jim and Bill make of this.

Tim Wu, posting on sparring partner Larry Lessig's blog, thinks that the Grokster opinion offers "words that could have been penned by Schumpeter." He quotes the court's statement that, "the introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through established distribution mechanisms . . . history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karoke [sic] machine, or an MP3 player."

This take on Grokster as offering just another sort of creative destruction bears closer examination. For market forces to respond and offer a balance, there must be some kind of market. And the difficulty of many new technologies is that it makes the ordinary boundaries of markets--contractual, physical lock-ups, statutory, difficult or impossible to enforce. (Come to think of it, several of the examples listed by the court above were "balanced" by statutory revisions, not pure market forces, though interventions like compulsory licensing were pretty ill-conceived).

Creative destruction through competition is one thing, but creative destruction through violating rights is another. The invention and widespread dissemination of a teleportation device would play havoc with laws against theft and assault, but I doubt that an optimal policy response would be to wait to see if the market offered "balance." One balancing force we see out there so far seems to be spoofing and other tricks to mess with the heads of file sharers. The trouble with Grokster as creative destruction is that there doesn't seem to be much that is creative about it. But the market is an amazing thing, certainly, it may yet develop a means of enforcing itself.

posted by Solveig Singleton @ 8:29 PM | Internet: P2P, Search Engines...

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