Slate’s Grokster Coverage

Dahlia Lithwick’s on maternity leave, so Grokster argument coverage comes from Emily Bazelon: Grok Around the Clock

Outside the courthouse today, a few feet away from the open-source guys are folks with guitars. Their signs read “Don’t Steal My Future” and “Feed a Musician.” That’s one way of putting the choice the court faces today—the techies vs. the musicians. (The choice is also between the big fat technology industry and the big fat recording industry, but never mind that.) The justices seem vexed by their choice. They don’t want to be the Luddites who killed off the next iPod, but they also don’t want to abandon all pretense of enforcing federal copyright law. So they vent a little by giving lawyers on both sides a hard time. Donald B. Verrilli Jr. is representing the studios that sued Grokster and StreamCast. When he implies that the court needs to clarify Sony, the justices want to know what he has in mind. “It’s not clear to me what your test is,” Justice Anthony Kennedy says (testily).

Verrilli’s proposed test is that a company like Grokster should have to show that its business is “substantially unrelated to copyright infringement.” Justice Stephen Breyer doesn’t seem happy with that standard. “Under your test, if you were counsel to Xerox, are you sure that you could recommend that your client go ahead with developing its product?” he asks. Then he repeats his question three times, swapping in for Xerox the VCR, the iPod, and Johannes Gutenberg’s printing press.

“My answers are yes and yes and yes and yes,” Verrilli responds—what choice does he have? Breyer says that in each instance, most of the foreseeable uses of the new technology could have involved copyright infringement. Verrilli backpedals. The test he wants now is that a company should be held liable when it makes a “material contribution” to copyright infringement with the knowledge that it’s doing so.

“But the maker of Xerox knows that!” Antonin Scalia exclaims. It’s not a good sign when Breyer and Scalia join forces. Worse, David Souter piles on. […]

[…] O’Connor asks whether [Acting Solicitor General Paul] Clement thinks the court should restrict itself to holding companies liable for “actual inducement” of copyright infringement. Scalia intercepts. “The actual inducement test doesn’t get you very far, does it, because a successor to Grapster or whatever this thing is called would know very well” how to avoid looking like an inducer. From this we learn that Scalia doesn’t care about sounding cool like Souter. Nor does Kennedy, who has just referred to Grokster as “an instrumentality program.”

Scalia wants Clement to explain how the court can stave off a world in which lawsuits stifle innovation. “What I worry about is the suit that comes right out of the box as a company starts up,” he says. Clement is open to giving the new kid on the block extra leeway. But he warns the court not to fall too hard for the innovation mantra. “The only newfangled idea here is that if you give someone else’s property away for free, you’re likely to attract users and advertisers,” he says. “But that is not the kind of innovation that we want to foster.”

[…] When [Grokster attorney Richard] Taranto starts to invoke Sony—he’s not interested in a new test—Scalia calls him off. “I hope you’re not going to waste too much of your time,” he says. “This court certainly is not going to decide this case on the basis of stare decisis.” That’s Latin for standing by Sony. Ouch.

Breyer, however, is no longer on Scalia’s team. For 21 years, he points out, the Sony test has allowed plenty of technology to flourish. But Kennedy attacks before Taranto can relax. “You want to say that unlawfully expropriated property can be used as startup capital,” Kennedy says. “From a legal standpoint and an economic standpoint, that sounds wrong.”

Taranto retreats to arguing that Congress, not the courts, should resolve the substantial policy questions at stake.