Today the Supreme Court ruled that Internet file-sharing services can and will be held liable if their services are primarily intended to allow customers to exchange copyrighted songs and movies illegally. The argument by respondents Grokster and StreamCast Networks that such lawsuits would stall the growth of new media technologies, which persuaded the lower trial and appellate courts, was unanimously rejected by the Supreme Court.
Writing for the Court, Justice David Souter concluded that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” The entertainment industry argued they needed protection against the billions of dollars of revenue lost to such illegal downloads. This ruling certainly provides some level of protection.
The tangible losses still felt by the music industry as a result of years of illegal downloads put the television and film studios on notice. Since then, the main response has been legal-namely, to file suit against infringers and the peer-to-peer services that served as an infringement gateway, and to add language to their contracts that prevent any electronic distribution of a film or TV show without the studio’s OK. But is this sufficient protection?
Legal recourse should be a last resort, not a first line of defense. The studios have started to develop web-based file-sharing technologies and services, such as MovieLink. But to truly forestall the bulk of illegal file downloads, the studios must push harder and faster to reach the cutting edge of technology. Apple’s iPod and iTunes are terrific examples of how the music business has adapted. If the film and TV industries don’t follow suit quickly, losses to date from illegal downloads will seem meager compared to those in the next 5 to ten years.