AALS Annual Meeting, Section on IP, part four

Justin Hughes: Hughes argued that courts and legislatures around the world have found similar intent-based solutions to the contributory infringement problem, suggesting that (1) it might be a good solution after all and (2) in any event, it won't leave the US at a competitive disadvantage in technology (my note: this is true only if you assume that US tech developers will develop the same kinds of new applications as other developers, but I have no reason to doubt that).

He started by noting that the much-reported decision of the French Assembly to legalize downloading for a monthly fee was a 30-28 vote in a 577-member house, so maybe it won't go much further than that. As he later elaborated, in France, the right of private copying exists but is limited to cases in which the copier already owns a copy, so you can't make a copy for a friend. Two recent court decisions in the past year, though, refused to find someone liable for downloading. The vote was to expand the right of private copying explicitly to encompass this situation. The trouble is, Hughes suggested, that the levy system that is part and parcel of the private copying right is flawed, especially from an American perspective. The current levy, imposed on blank media, is given to the French collecting societies. They take 25% off the top for administration (and apparently have very nice lunches as a result). Another 25% funds French cultural activities. The remaining 50% goes to French artists ... even when the private copy is a copy of an Eminem CD. So, the distribution problems are enormous and Americans typically get screwed.

Turning back home, Hughes argued that the Grokster Court did what courts do, which is remind us that law includes notions of justice, one of the most powerful of which is that people with bad intent should suffer. This was, in his opinion, the right result -- rather than trying to make industrial policy as Neil Netanel suggested, the court was more modest. Businesses can use intent as a guide with some confidence; they do so in antitrust and trademark (here Hughes referred to his colleague Barton Beebe's study of trademark cases in which intent emerged as the single most important factor in explaining infringement case outcomes). Instead of decrying Grokster's effects on technology, we can study them -- he suggested that law professors were overly concerned because we're trying to tell ourselves that what we do is important, whereas most actual businesses don't know squat about IP and don't make business decisions based on fears of liability.

Moreover, Grokster's doctrinal weirdness (as discussed by Wendy Gordon) stems from the fact that Sony was weird in the first place. The Supreme Court, just a few years after the new Copyright Act came into effect with no express provisions about contributory liability, created a new kind of liability. There is some legislative history suggesting that the Act does contemplate contributory liability, but it would have been at least as sensible to say that the existence of contributory liability provisions in the patent law, which was revised during the same period as the copyright law, justified the negative inference that no such liability was appropriate in copyright. Congress plainly knew how to write a contributory liability provision if it wanted to, and it didn't. Instead, the Court borrowed from patent law -- but only part of patent law, not inducement. Grokster thus stands as a course correction on an already weird path.

Comparatively speaking, there has been convergence on contributory liability; courts and legislatures have used some combination of causation, knowledge and intent to judge liability. (Hughes suggested that Sony could be seen as a reverse causation case: if a technology causes substantial noninfringing use, it wins.) In Singapore, for example, "authorization" is the offense of P2P networks -- such networks are liable because they create an impression of authorization to reproduce and distribute works; this also incorporates a causation standard.

In 2003, there was a P2P case in Japan, the Rogue File case, which involved a centralized server like Napster's (the server was in Canada). Users had to agree not to infringe, and the network had a notice and takedown procedure. The Japanese court's analysis was like that in Grokster, holding that reproduction and transmissibility rights under Japanese law were both infringed. The appellate court in Tokyo adopted a balancing test taking into account the content and nature of the defendant's conduct, its ability to supervise infringement, and whether it profited from infringement. It used the language of inducement in its decision, and found that the defendant was liable because it provided the service although it "expected" infringement -- a really expansive standard, since one can expect results without intending them and even be very sorry they occurred. This illustrates how hard it is to draw the line between knowledge and intent, since it's always an exercise in mind-reading.

Another Japanese case is also instructive, the 2004 Winny case from Osaka. Winny is something like Fastrack and Gnutella; it has supernodes for P2P filesharing. According to Hughes, Winny creates a hard-to-find file on your system and caches things you didn't think you downloaded. The professor who developed Winny has been criminally indicted. So Grokster looks a little better in comparison if you worry about deterring tech.

Hughes also spoke about China's Baidu, a major search engine (not P2P). On the site, you could click a button that said "mp3s," and then a button that said "artists." A Chinese court said that this violated the distribution right.

According to Hughes, we copyright minimalists should relax a little.