OUTCOME OF GROKSTER CASE COULD AFFECT DEVELOPMENT OF ELECTRONIC REPRODUCTION AND DISTRIBUTION TECHNOLOGY
24 January 2007 - Case Western Reserve University

In a forthcoming paper in the Wisconsin Law Review, Professor Raymond Ku examines the implications of the case Metro-Goldwyn-Mayer Studios v. Grokster. Ku argues that the case is about more than whether the creators of the software program Grokster can be held liable for people who use the program to share and download music, movies, and other copyrighted works. Rather, the case represents two competing visions of how society promotes progress.

Ku identifies the competing positions in the case as the "property pragmatist" and the "property idealist" approaches. Idealists believe that certain forms of property ownership include the right to exclude competition, and that the courts should enforce the exclusion. Pragmatists believe that property rules, such as those created by copyright law, serve specific policy goals, and can be modified when there is a change in circumstances, such as the introduction of a new technology. In other words, says Ku, "for the pragmatist, property rights are not absolute, and recognizing or expanding a property right may not be the best method for achieving the law’s ultimate purpose."

Ku notes that a precedent for Grokster exists in the 19th-century case Charles River Bridge v. Warren Bridge. In that case investors in the Charles River toll bridge in Boston sued after a newer bridge, the Warren Bridge, stopped charging tolls, thereby drastically decreasing the use, and value, of the older bridge. The Charles River bridge owners claimed that the revenues generated by their bridge’s tolls were property rights and could not be invaded by the establishment of a competing bridge.

The Supreme Court ruled against the Charles River bridge owners, saying that for the courts to recognize the claim of being free from competition would usurp the authority of the legislature. The court also realized says Ku, that "a decision in favor of the Charles River Bridge could seriously retard progress by allowing the businesses of the past to delay improvements and hold the future hostage."

Ku argues that the same concerns which prompted the Supreme Court to adopt the "pragmatist" approach in the Charles River Bridge case also apply in the Grokster case. First, he notes, giving copyright owners control over the opportunities created by file sharing technology requires choosing between competing interests and evaluating complex facts, a task better suited to legislatures than the courts. Second, a decision to protect the copyright holders would insulate a particular set of values and economic interests for many years to come.

Ku notes that copyright represents a paradigm based on certain assumptions and conditions, especially the assumption that "exclusive rights are necessary to secure the desired level of creation and distribution of creative works." However, the new technologies of digital copying and distribution are changing the paradigm. "By eliminating the need for distribution middlemen and making it possible to fund artists without denying the public access to their work," Ku says, "the Internet and digital technology challenge the existing paradigm and promise an altogether different world in which artists are compensated and the public enjoys unlimited access to the collective works of humanity."

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