Colleges Split Over Effects of Court Ruling on File Sharing

Some say it will encourage adoption of legal services; others predict little impact

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By ANDREA L. FOSTER

Washington

College officials are divided over the impact of the U.S. Supreme Court's ruling last week that commercial producers of file-sharing software can be sued for copyright infringement. The software has been wildly popular among college students, who use it to download songs and movies -- usually in violation of copyright law.

Some college officials say the decision will have little impact, either on colleges' policies regarding music and movie downloading or on whether they decide to sign deals with companies that offer legal downloading services. But other officials say the court's ruling could lead to an increase in such deals, through which colleges hope to lure students away from illegal file sharing.

The court's decision was a disappointment to scholars and technology developers who had tried to persuade the justices that a decision in favor of the entertainment industry could stifle technological innovation and prevent scholars from legally trading data, video, music, and literature using peer-to-peer networks.

As for students, many are expected to continue swapping songs and movies online -- and to go on violating copyright -- even if subsequent court rulings force the file-sharing companies to shut down. Students may be able to continue using existing versions of file-sharing software even if the companies have to close their doors. The software lets users search other users' computers for sought-after works.

The unanimous decision in the case, Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd., was a victory for music and movie studios that say they are losing income to software piracy. The court's unambiguous language clearly spelled trouble for companies that have created file-sharing software, notably Grokster and StreamCast Networks Inc., creator of Morpheus.

"We hold that one who distributes a device with the object of promoting its use to infringe copyright ... is liable for the resulting acts of infringement by third parties," Justice David H. Souter wrote for the court.

The decision sends the case back to the U.S. Court of Appeals for the Ninth Circuit, in San Francisco, for further consideration. The appeals court, in upholding a lower court's ruling in favor of the file-sharing services, had dismissed MGM's claim that producers of the file-sharing networks were liable for contributing to copyright infringement (The Chronicle, September 3).

'Inducing' Piracy

The justices said file-sharing companies could be accused of "inducing" copyright infringement because they intentionally encouraged the activity and because the evidence of infringement was overwhelming. The companies' business plans called for promoting their services to computer users who download material illegally, the opinion stated.

Justice Souter noted that the services did not develop filtering tools to try to stop infringement. In addition, he pointed out, the companies generate income by selling advertising, which is streamed to users of the file-sharing software. He also observed that both Grokster and StreamCast had tried to attract former users of Napster, a file-sharing service that was ruled illegal and forced to shut down (The Chronicle, February 23, 2001). Napster was later reborn as a legal file-sharing service, marketing songs and movies on college campuses and elsewhere.

Justice Souter acknowledged that there was evidence that the peer-to-peer networks are sometimes used legitimately to trade scholarly material. "Peer-to-peer networks are employed to store and distribute electronic files by universities, government agencies, corporations, and libraries, among others," he wrote.

Some technology experts were quick to latch on to the Supreme Court's statement that it left the Betamax standard intact. The standard allows the development of technologies that may have infringing uses as long as they have substantial noninfringing uses (The Chronicle, April 8).

If the court had overturned the standard, reached in a 1984 Supreme Court case involving videocassette recorders, "researchers working in computing and communications development would need to fear liability for uses of their inventions that may not exist yet," said Eugene H. Spafford in a written statement issued by the U.S. Association for Computing Machinery, a group for computer scientists in industry, academe, and government.

He said the court had affirmed the group's position "that laws should apply to people and their acts, and not to the technology involved in the act." Mr. Spafford is a computer-science professor and executive director of the Center for Education and Research in Information Assurance and Security, at Purdue University.

But others disagreed. Fred von Lohmann, legal counsel for the Electronic Frontier Foundation, a nonprofit group that promotes civil liberties online, said the ruling left the Betamax standard in doubt.

"America's entire innovation sector is going to now face a new theory of copyright liability ... one that will tie up courts for some time," he said. The Supreme Court's "inducement" test for contributory copyright infringment, he added, "has opened the door to lawyers asking to see the notes of engineering meetings."

Both sides in last week's landmark case predicted they would prevail if the lawsuit goes to trial in the lower court, although the justices seemed clearly to be siding with the entertainment industry. The two sides could also settle out of court.

Legal Alternatives

Sheldon E. Steinbach, vice president and general counsel at the American Council on Education, said the decision would encourage colleges to sign contracts with online services that allow students to download music legally. At least 20 institutions now provide students with free access to online music libraries like Napster and Cdigix.

"My best guess is that an increasing number of schools will look at providing a legal mechanism for their students to download CD's," Mr. Steinbach said.

He also predicted that colleges would step up efforts to educate students about the liability they face when downloading copyrighted music and movies. The Recording Industry Association of America and, to a lesser extent, the Motion Picture Association of America have filed thousands of lawsuits against individuals who swap music online. Many of the suits filed by the recording-industry group are directed at college students.

"One needs, unfortunately, a constant reminder that the downloading of CD's and of motion pictures is theft and a violation of the copyright law," said Mr. Steinbach.

Charles E. Phelps, provost of the University of Rochester, agreed that colleges probably would increase efforts to educate students about copyright. He also said colleges will become much more active in trying to block the file-sharing services from campus networks.

Rochester has signed deals with Napster and Cflix that allow students to download songs and films legally from those services.

"The university world, including myself, has been basically saying that file sharing is not illegal, and -- since we so highly value free speech and avoid censorship -- that we're going to stay out of the business of finding and blocking file sharing," said Mr. Phelps. "This case could change that attitude considerably."

William M. Mahon III, a spokesman for Pennsylvania State University, said the court's ruling would have no impact there. Penn State was one of the first universities to sign a deal with Napster, enabling students to listen to a large selection of music legally and at no cost. They must pay per-song fees, however, to download music permanently.

"It reaffirms that we went down the right path," said Mr. Mahon of the policy of paying for Napster's services. "It's something we put in place a year and a half ago, and we're scheduled to continue it next year."

Georgia K. Harper, a lawyer for the University of Texas System, said the court's decision was unlikely to affect the behavior of colleges toward illegal file sharing. "We are already doing pretty much everything we should do," she said.

Little will change at the Catholic University of America, which requires students to view a video about copyright infringement and then take a quiz about it, said Margaret L. O'Donnell, assistant general counsel. The university will probably not try to increase efforts to stop file sharing on the campus, she said. "Colleges are already maxed out on their resources they can expend policing students."

Nor is Catholic University likely to be tempted to enter into a deal with an online music service, said Ms. O'Donnell, who has heard mixed reports on whether students actually take advantage of the services.

Edward W. Felten, a computer-science professor at Princeton University, criticized the Supreme Court for finding fault with Grokster and StreamCast for not developing filtering tools that might have reduced illegal file sharing. "There is every reason to believe that filtering technology would add to the cost and complexity of the companies' software, without substantially reducing infringement," he wrote on his blog, Freedom-to-Tinker.com.

Impact on Innovation?

Mitch Bainwol, chairman and CEO of the recording-industry association, said the group would continue to sue individuals who download music in violation of copyright law, and the group announced another round of lawsuits two days after the court's ruling. He predicted that consumers would increasingly turn to legal music services.

"In a perfect world, everyone would be switching to legal services after this decision," Mr. Bainwol said. "But for those who don't do so, there will still be deterrents."

He also scoffed at scholars who say the decision could stymie technological innovation. "Calling this decision a threat to innovation is fearmongering," he said.

Other experts offered a more measured view of the verdict's impact on innovation. "I think the court ended up almost exactly in the spot I would have wished them to," said James Gibson, an assistant professor of law at the University of Richmond who filed a brief encouraging the justices to hear the case. "The opinion doesn't focus exclusively on technology in a vacuum. It looks at whether companies are encouraging infringement."

Peer-to-peer networks that haven't explicitly marketed themselves as repositories for illegal material should have little to fear from the decision, said Mr. Gibson, who runs the National Cybereducation Project, a Web site for college students about intellectual-property law. Services like BitTorrent -- which is popular with movie swappers but which discourages illegal copying -- "should be fine," he said.

Justice Souter's decision was accompanied by concurring opinions by Justice Ruth Bader Ginsburg and Justice Stephen Breyer. The opinions can be read on the Supreme Court's Web site (http://www.supremecourtus.gov/opinions/04slipopinion.html).

Brock Read contributed to this report.