The Law and Technology

In this blog I will disucuss the confluence between traditional and emerging doctrines of law, and technological applications of the 21st Century.


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Monday, November 13, 2006

The Marketplace Prevents Another Grokster

Although the law surrounding digital copyright is far from clear, there is one thing that can be easily said about innovation and infringement: Whenever a company develops a new product that is capable of infringement, the company always wants the product to be like Sony's betamax and not like Grokster.

It's very difficult to reconcile Grokster with Sony (in fact some argue that they cannot be reconciled), however I think that it's safe to say that flagrant tools of infringement cannot safely be brought to market under the current legal regime, while new tools that can only infringe through some sort of out of the ordinary usage of the device safely can be brought to market.

Indeed, this makes things a bit difficult for manufacturers who develop products that include features that arguably, but not certainly, infringe a copyright. Large manufacturers with a lot at stake do not want to live with this uncertainty, and Microsoft is no exception.

In the near future, Microsoft will release its new Zune MP3 player, and the new device has a very interesting feature: The player will let you 'beam' data to another Zune player. Clearly, this is a prima facie case of infringement, but the user could easily raise a fair use defense. In any case, it is very much uncertain whether the Sony safe harbor will shield Microsoft, or if Grokster liability will attach.

Microsoft decided to solve the problem not with the courts, but rather using the open marketplace. Built in to the device and its software is a limitation. The user can beam content to another player, but the second player can only play the music three times in order to sample to songs and decide whether he/she wants to purchase the MP3 file. Also, Microsoft will pay a royalty not only on the actual sales of MP3 copies through it's internet storefront, but also on the players themselves.

This seems like a great cure for the common Sony dilemma - the product comes to market, users can easily and legitimately share music with friends who wish to sample new artists and genres, and the cost of all of this is quite small.