Peer-to-Peer and Substantial Noninfringing Use: Giving the Term "Substantial

Journal of Intellectual Property Law Volume 12 | Issue 2 Article 7 April 2005 Peer-to-Peer and Substantial Noninfringing Use: Giving the Term "Substantial" Some Meaning Richard M. Myrick University of Georgia School of Law Follow this and additional works at: https://digitalcommons.law.uga.edu/jipl Part of the Arts Management Commons, Entertainment, Arts, and Sports Law Commons, and the Intellectual Property Law Commons Recommended Citation Richard M. Myrick, Peer-to-Peer and Substantial Noninfringing Use: Giving the Term "Substantial" Some Meaning, 12 J. Intell. Prop. L. 539 (2005). Available at: https://digitalcommons.law.uga.edu/jipl/vol12/iss2/7 This Notes is brought to you for free and open access by Digital Commons @ Georgia Law. It has been accepted for inclusion in Journal of Intellectual Property Law by an authorized editor of Digital Commons @ Georgia Law. Please share how you have benefited from this access For more information, please contact . Myrick: Peer-to-Peer and Substantial Noninfringing Use: Giving the Term " PEER-TO-PEER AND SUBSTANTIAL NONINFRINGING USE: GIVING THE TERM "SUBSTANTIAL" SOME MEANING On September 8, 2003, the Recording Industry Association of America (RIAA) filed lawsuits against 261 defendants alleging that these individuals had infringed the copyrights of RIAA members through the use of peer-to-peer networks, also known as P2P. By September 9, 2003, the first of these lawsuits settled-for around $2,000-largely as a result of the public outrage after it was revealed that this suit had targeted a twelve-year old honors student living in a New York city housing project.' Since then, the industry has filed over 7,000 lawsuits against individual file sharers using a variety of peer-to-peer services. 2 These lawsuits are largely the result of a ruling against the industry in the Ninth Circuit that has made it extremely difficult, if not impossible, to pursue contributory infringement claims against the software providers who make file sharing possible.3 The Metro-Golduyn-MayerStudios Inc. v. Grokster4 ruling put the Ninth Circuit in conflict with the Seventh Circuit's ruling in In reAimster Copyright Li''gations and set the stage for the Supreme Court to grant the recording industry's petition for a writ of certiorari in the Grokster 1l litigation on December 10, 2004.6 Ideally, the Supreme Court will produce a decision that brings much needed clarification to this recurring problem. Part I of this Note will briefly examine the architecture of a variety of peer-topeer file sharing networks in order to explain the different results in contributory ' Jefferson Graham, RL4A Lawsuits Bring Consternation, Chaos,USA TODAY, Sept. 10,2003, at 4D. 2 Jefferson Graham, Record Labels Cut Deals with File-SharingCompanies, USA TODAY, Dec. 3, 2004, at 3B. 3 Mike France, Striking Back, Bus. WK., Sept. 29, 2003, at 94. France states: Before taking teenagers to court, the RIAA also wanted to see if it could stop the problem by shutting down Web sites that facilitated piracy. Though lawyers shut down Napster in July, 2001, other peer-to-peer networks carefully designed to skirt the law, such as Morpheus and Grokster, quickly rose up in its wake. The industry sued the second-generation pirate sites in October, 2001, and was expecting a similar result in court. But on Apr. 25, 2003, a federal judge in Los Angeles ruled that Morpheus and Grokster could remain open. The devastating ruling meant that it would be impossible to kill music web sites in court, leaving the industry with only one legal option: suing consumers. 4 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., 380 F.3d 1154,72 U.S.P.Q.2d (BNA) 1244 (9th Cir. 2004) [hereinafter Grokster1]. ' In reAimster Copyright Litigation, 334 F.3d 643, 67 U.S.P.Q.2d (BNA) 1233 (7th Cir. 2003) [hereinafter Aimster Ii]. 6 GroksterII, 380 F.3d 1154, cert.granted, 125 S. Ct. 686 (2004). Published by Digital Commons @ Georgia Law, 2005 1 Journal of Intellectual Property Law, Vol. 12, Iss. 2 [2005], Art. 7 J. INTELL PROP.L [Vol. 12:539 copyright infringement claims against these networks. Part II will discuss the background of the contributory copyright infringement action, especially as applied by the Supreme Court in its landmark 1984 Sony Corporalion ofAmerica v. UniversalCy Studios, Inc. decision. Part III will examine the two divergent paths that the Seventh and Ninth Circuit have followed in applying Sony to peer-to-peer software providers. Part IV will argue that the Supreme Court should adopt the Seventh Circuit's reading of Sony in the peer-to-peer context as it produces better policy results, is more in line with the spirit and letter of the Sony decision, and offers a more economically efficient litigation strategy for copyright holders to pursue in protecting their rights. I. INTRODUCTION TO PEER-TO-PEER SOFTWARE Even by the standards of the rapidly evolving Internet, the widespread use of peer-to-peer networks is a relatively new phenomenon.' Peer-to-peer networks are a class apart from the usual client-server model of the World Wide Web, where users seek information from a centrally located computer that is connected to the Internet.' In a peer-to-peer network, users around the world can act as a source of information for other users connected through the network at the same time they take in information from these or other users who are similarly connected. 9 With the popularity of peer-to-peer services for sharing both copyrighted and uncopyrighted materials in recent years, it should come as no surprise that many different methods for connecting interested computer users have developed.' ° The different structures of these networks can have profound effects on the various peer-to-peer providers' exposure to contributory copyright infringement liability." The architect basically has three broad design options in setting up a peer-topeer network. 2 This choice can have a dramatic effect on the scope of the provider's exposure for contributory copyright infringement. 3 The first option Peer-to-Peer-TheNext Computing Frontier,Bus. FINANCE, Sept. 2000, at 54. Id. Richard Waters, The Exchange of Music, Films and Pieces of InformationAmong Networks of Home Computers is Confounding the Ambitions ofSoftware, Hardware and Telecoms Groups, FIN. TIMES, July 19, 2000, at 22. 10 See Tim Wu, When Code Isn't Law, 89 VA. L. REV. 679, 719 (2003) (noting "four recognized classes of application design"). " See, e.g., GroksterII, 380 F.3d 1154,72 U.S.P.Q.2d (BNA) 1244 (9th Cir. 2004); A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 57 U.S.P.Q.2d (BNA) 1729 (9th Cir. 2001) [hereinafter Napster nI. 12See Wu, supra note 10, at 719. 13See, e.g., GroksterII, 380 F.3d 1154; NapsterI, 239 F.3d 1004. https://digitalcommons.law.uga.edu/jipl/vol12/iss2/7 2 Myrick: Peer-to-Peer and Substantial Noninfringing Use: Giving the Term " 2005] PEER-TO-PEER, SUBSTANTLL NONINFRINGING USE 541 in setting up a p (...truncated)