AALS Annual Meeting, Section on IP, part one

This year's IP panels at the Association of American Law Schools were uniformly high-quality and provocative. I'm going to post my notes, which are of course filtered through my preconceptions.

Thursday, Jan. 5
Section on Intellectual Property,
Co-Sponsored by Section on Law and Computers

The Direct and Indirect Infringement Issues Surrounding P2P: Sharing or Piracy?

Neil Netanel, UCLA: He ran through the holding, concurrences, and open issues of Grokster. The Court put aside the issues of supplying a multiuse product generally (what is "substantial" noninfringing use, what does it mean to be "capable" of such use) and focused on inducement. The Court said both that it has long been possible to be contributorily liable by inducing infringement and that it was importing the doctrine from patent law -- why say both things? Because inducement long required knowledge of specific infringing acts; now general knowledge is enough. The Court's actual test is potentially quite narrow, though Netanel is concerned with the implications. In particular:

(1) Discovery: The relevance of motive opens internal communications to discovery in future litigation against technology innovators.
(2) Procedurally: For similar reasons, it will be hard to win dismissal of contributory infringement cases at an early stage.
(3) Substantively: The Court is far from clear about what constitutes inducement. Are mixed motives enough for liability? Mistaken assumptions about what's fair use?

Risk-adverse firms will thus avoid the penumbra of the Court's ruling, with substantial impact on commercial firms but not much effect on open-source and fly-by-nighters. Congress typically works out a compromise with new technology for a compulsory copyright license; here the Court made a broad ruling of liability on a preliminary record. Netanel would prefer to see a more industrial policy-oriented, balancing approach; bad motives are beside the point in industrial policy, and courts are ill-suited to address the fundamental issues of industrial policy.

My comments on Netanel's points about which firms are most affected by Grokster: the No Electronic Theft (NET) Act was designed to criminalize noncommercially motivated deliberate infringement, which assumed much greater importance in the internet era. But it's not just wide-scale infringement that's gone noncommercial, it's the tools of infringement too. This has relevance for DMCA issues as well.