Larry Lessig: Grokster Decision Will Chill Innovation

Posted by: Rob Hof on June 28, 2005

Stanford law professor Larry Lessig knows what he’s talking about when it comes to the collision of technology and intellectual property law. Today, the day after the Supreme Court essentially ruled the file-sharing services such as Grokster aren’t protected from lawsuits by copyright holders whose material is traded on their networks, I talked with him about the decision. The interview is here on BWOnline, but here’s a taste of what he had to say about the impact of the decision on innovation:

“By making it a process that goes through the courts, you’ve just increased the legal uncertainty around innovation substantially and created great opportunities to defeat legitimate competition. You’ve shifted an enormous amount of power to those who oppose new types of competitive technologies. Even if in the end, you as the innovator are right, you still spent your money on lawyers instead of on marketing or a new technology.”

“Already, money has shifted into places which will avoid any conflict with the copyright holders. Why buy a lawsuit when you can buy a new innovation that doesn’t get you a lawsuit? And you don’t even see it; you don’t even know what you don’t get, because people are afraid.”

“It might take 10 years of litigation to get a clear sense of this. That’s 10 years of chilled innovation.”

Reader Comments

John Smith

June 29, 2005 12:43 AM

So let me try to understand Larry's problem here... He is bemoaning the fact that money is shifting to "places which will avoid any conflict with the copyright holders." Wow... what a concept. The creators get paid for a change! Why would Larry have a problem with that? Why not try to innovate in a way that HELPS the music instead of destroys it? I'll never undersatnd this guy, and he'll never really understand copyright. (Witness the drubbbing he took in the Copyright Extension case! He built his entire case on the First ammendment and the court dismissed it in one sentence *LOL*)
Get another "expert" to interview... this guy is intellectually bankrupt

Rob Hof

June 29, 2005 10:13 AM

In Larry's defense, he did make it clear that he adamantly opposes the infringement on Grokster and Streamcast. I didn't include that particular statement, since it seemed self-evident that he doesn't condone lawbreaking. His contention, and clearly reasonable minds can disagree, is that the courts have traditionally been careful not to protect copyrights to such a great degree that that protection discourages innovation.

Dorrian Porter

June 29, 2005 12:12 PM

No garage entrepreneur consults a lawyer for advice on how to avoid litigation and few think twice. Apple does. Microsoft does. Google probably now does. But the real innovation, the kind that comes from the minds of the passionate and the actions of the purposeful, don't consult their lawyers. They will create, they will build and they won't get attention from the companies looking to sue until it's too late for the industry to have felt real change. Clearly, the Court could have done better in articulating a test, but please don't tell me that Congress could have done better. The economically motivated will find lots of other reasons to use the courts and a Congress enacted law would not prevent future litigation.

anonymous

June 29, 2005 2:27 PM

Mr. Hof, you said, "it seemed self-evident that [Lessig] doesn't condone lawbreaking." Unfortunately, it isn't. The unanimous Supreme Court found "clear" and "unmistakeable" evidence that the distributors of Grokster and Morpheus intentionally induced copyright infringement. If they did, then they also broke many longstanding criminal laws. See 18 U.S.C. §§ 2, 371, 241,1961-68.

Lessig did not argue that Grokster’s intent to induce was not “clear” and “unmistakeable.” He found that irrelevant. So Lessig is arguing that unless we condone lawbreaking, "innovation" will be chilled. In a trite way, this may be true: People would find many innovative ways to rob banks (or convince others to do so) were such innovation a defense to criminal prosecution. It isn’t, because we want to encourage people to “innovate” in lawful ways. Fanning’s new Snocap service suggests that we could have had legal P2P downloading services sooner but for P2P's long diversion over illegal downloading.

Rob Hof

June 29, 2005 3:23 PM

Anonymous, I believe that Larry's Lessig's argument doesn't rest on condoning lawbreaking, but here's an exchange, which wasn't included in the Q&A, that lets him say what he means in his own words:

Q: I guess you’re agreeing that this copyright infringement is wrong. What should be done about that?
A: Oh, I absolutely think it’s wrong. We filed a brief totally condemning the piracy that’s going on using these networks—leaving open the question that maybe Congress needs to think about how these businesses frame themselves. If Congress had passed the same statute, I wouldn’t have supported it, but it would be less troubling. Because we know how to gauge and correct for what Congress is going to do. In some sense, it’s less costly to innovate when Congress intervenes. But when the Supreme Court does it in this opinion that’s inviting common-law adjudication about this, then that’s what’s creating this innovation tax.

nanana

June 29, 2005 4:01 PM


Actually, Lawrence Lessig is a lawyer. He knows nothing about innovation. Sorry. The concept of copyright arose in response to the printing press. All of these hundreds of years and countless inventions later, innovation seems to thrive. I think Professor Lessig needs to analyze his position a bit.

Oh, and his idea that Congress will address these issues is laughable. For one, the owners of intellectual property assets in this country (and around the world) do not have an incentive to support elected officials who seek to limit their ownership rights. As we move further and further into a service based economy, we have to place a value on the assets driving the economy, intangible intellectual property.

anonymous

June 29, 2005 4:53 PM

Mr. Hof, Lessig's brief merely confirms that he would deem "clear" and "unmistakeable" evidence of (potentially criminal) wrongdoing irrelevant. And his defer-to-Congress argument IS "intellectually bankrupt": Why would Congress have to decide whether a past Supreme Court exercise in “common-law lawmaking” actually immunized criminal conduct from private enforcement?

In Sony-Betamax, the Supreme Court – through “common-law lawmaking” – created the capacity-for-substantial-noninfringing-use defense that Grokster tried to exploit. The Court did this by importing into the Copyright Act a limitation on liability Congress codified only in the Patent Act. In the Patent Act, this defense is inapplicable when there is intentional inducement. So the Grokster Court thus had both the right and the duty to decide whether its “common-law lawmaking” in Sony imported only the defense or the defense and the limitation that prevents its abuse.

Worse yet, Lessig has described those engaged in the "piracy" he now condemns as "our children." He thus argued that the Supreme Court could not decide whether its own decision allows sophisticated corporations to profit by encouraging "our children" to break the law. That claim is both absurd and ugly.

bmt

July 3, 2005 8:54 PM

nanana:

yes lessig is a lawyer, copyright arose from the innovation of the printing press...but copyright was enacted because of monopolies' dominating control due to allowance of the queen... it's interesting to see who the monopolies are now

kpe

July 4, 2005 12:07 PM

The courts decision may have been unanimous but its results are far from clear.

The decisions leaves perfectly legal uses in doubt along with the legal uses by leaving to individual courts to decide what inducement is. Do we shut down the highways because some people speed?

At least with congressional action the rules can be read and followed. Here innovators must wait to see what the lawyers and judges decide. The entrenched music industry to be sure has far more lawyers looking out for its interests.

In the end this action will have very little impact on the actual trade of illegal music.

Nanana is right we do have to put the emphasis, going forward, on intellectual property rights. That is what Lessig is fighting for.

Amantha

July 5, 2005 1:58 PM

There's little to no legitimate usage going on with filesharing programs like Grokster. The only protocol I've seen being used for legal use is BitTorrent. I think all of these other P2P applications are open game in the eyes of court, and that's how it should be.

-Amantha

http://hometown.aol.com/starkrai/androgel.html

December 16, 2006 7:43 PM

There's little to no legitimate usage going on with filesharing programs like Grokster. The only protocol I've seen being used for legal use is BitTorrent.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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