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Turning the Tables to Follow the Money

6 Jul, 2005 By: Holly J. Wagner

The U.S. Supreme Court's decision in MGM vs. Grokster raises some interesting questions about the history and the future of the industry.

One of the more striking points of the decision is that it was not exactly as unanimous as celebrated: There were two minority opinions — one preserving the Betamax standard and another urging its demise. The majority avoided that argument and instructed lower courts to look at Grokster's intent, leaving the Betamax standard, which the court refers to as the Sony doctrine, in limbo.

Does that mean the other studios should sue Sony for the banner ads it used to run for its VAIO computers — the ones with the slogan “Rip. Burn. Play.”? If I was litigating for Grokster, I would be sure to bring that up at trial.

In Grokster, Justice Stephen Breyer wrote that Sony knew about 90 percent of its users were taping copyrighted material off the air, but the court found that significant noninfringing uses for the technology could emerge if it was given time. The video rental industry wasn't mentioned in that case because the Betamax decision allowed companies to market VCRs, and the rental industry grew up after that to fill a new demand. Breyer suggests that peer-to-peer and other technologies should have the same chance.

The same legal departments that today launch lawsuits against folks for trading copyrighted materials have, over the years, allowed copyrights for many of their titles to lapse into the public domain. The old MGM was one of the studios where that happened a lot, especially back in the 1960s and '70s. Usually this is because short-sighted content companies can't foresee any future use for their tired old product.

Can I just point out the bitter irony that since Sony bought MGM last September, the company that was the defendant in the 1984 case that gave us the Betamax standard and created an industry is today the lead plaintiff in the case most actively seeking to have that standard overturned? If that isn't evidence that time and technology can turn the tables, I don't know what is.

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