PFF's amicus brief in Grokster is on the presses at this very moment. Our press release is here.

Our main theme is:

The dispute here cannot be characterized as a contest of "content providers vs. tech companies," or "producers vs. consumers." It is not a zero-sum game, in which gains by one interest are the reciprocal of losses by the other.

Instead, the case requires reconciliation of two complementary interests of consumers, each of which has been recognized in decisions of this Court.
. . . .
The consumer interests embodied by Sony and Eldred should not be called "competing values" because they do not contradict each other. Each is absolutely necessary to the full consummation of the other. Consumers are not served by the existence of an infinite amount of dazzling hardware if they have no content for it, nor are they served by libraries of content if they lack means to enjoy it.

So, while either value, pushed to the limit of its logic, is capable of doing serious and perhaps total damage to the other, this would (to wax a bit anthropomorphic) be a suicidal act, because either value in the course of destroying the other would destroy itself.

Consumers have two strong interests: (1) Avoiding inhibitions on technological progress; and (2) Fostering the production of content by providing incentives to creators.

These are complementary, not conflicting, because each is necessary to the other. Technological devices are useless without content, and content is pointless without means of delivery. But they must be reconciled, because, each taken to the limit of its logic, can do serious harm to the other.

The Ninth Circuit focused totally on the need to avoid any inhibition on technology, and in so doing it lost sight of the equally important consumer interest in promoting content.

Consumers face a collective action problem of the type known as Prisoner's Dilemma, the name applied to situations in which the immediate incentives operating on each individual work to undermine the interests of the whole group. In the context of music, each consumer is better off if he or she has total access to unauthorized file-sharing while every other consumer pays for the music. But if everyone responds to this calculus of personal interest, the whole system collapses and everyone loses.

A crucial function of legal rules is to avoid such results. But the Ninth Circuit failed to recognize that no group of consumers, interested in solving its Prisoners Dilemma problem and maximizing its long-term enjoyment of music, would select a legal regime that allows the untrammeled operation of Grokster and similar programs. Such a regime would quickly distribute the existing stock of music, but would provide no incentives for future production, and would destroy any hope for the creation of legitimate Internet distribution systems that can provide continuing incentives to the creative community.

Also, the Ninth Circuit was mistaken in its application of the "capable of substantial non-infringing uses" language from Sony. No one in this case argues that P2P as a technology should be banned. The issue, rather, is the business practices which the filesharing companies are wrapping around this technology. These can and should be the subject of judicial inquiry, and condemned when they create business models that can fairly be classified as deliberately dependent on infringement.

Finally, this Court has been urged to defer to Congress. This is bad advice, because it assumes that Sony was rightly applied below. Also, the present situation needs cautious, common law approaches, not sweeping efforts to solve poorly-understood problems at one hack. Congress will benefit greatly if this Court gives it some breathing space.

posted by James DeLong @ 11:00 AM | Internet: P2P, Search Engines...

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