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MGM v. Grokster: Inside the Supreme Court's Decision

GroksterReading today's Supreme Court unanimous ruling, I think Grokster lost simply because they wanted it both ways. They wanted to be a passive operator like AOL without having to monitor the (il)legality of what their customers do. Yet they want to operate their business like a network and collect affiliate and transaction fees. And they're still in denial - their home page still celebrates the Ninth Circuit ruling that was reversed today.

P2P progress is hampered by so many flawed arguments. Tim Armstrong's blog of the case is one of the highest rated citations on Google - and yet, what he says about the iPod and his supporting arguments seem somehow incorrect. Steve Jobs knew what he was doing when he negotiated with MPEG-LA to get the MPEG licenses, and the entire iTunes business model was based on legal music online delivery. The Open Mobile Alliance knew what it was doing as well when it negotiated a similar license. You can't be in the business of online music and not understand the significance of copyright.

It makes it much harder when decisions like this are used by people to reassure themselves that the suits and the courts "don't get it". Armstrong argues that MGM suits don't believe that people can legally rip their own CDs. Hello? The 1992 Audio Home Recording Act attempts to shield consumers for home copying for noncommercial use and provides limited protection for companies from infringement liability. Did Grokster pay the 3 percent statutor blanket license fee required by the Act? I doubt it. For them, it would be like paying a tax. Or paying the rights holders.

People like Corante's Ernie Miller are right when they argue that the notions behind the mechanical reproduction compulsory are dated. Ernie also points out some useful updates to the P2P discussion on GrafoDexia.


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