Semi-Hooray for Hollywood ...

June 28, 2005

The specter of the Sony Betamax, a failed technology that never amounted to much but still managed to haunt Hollywood for years, was almost lifted Monday. In a unanimous decision, the Supreme Court ruled that technology companies can be held liable when their users steal intellectual property like copyrighted movies or music.

So Hollywood need not fear that peer-to-peer file sharing will continue to threaten its profits. But we say "almost" because, like Jason in "Friday the 13th," the Betamax — or rather, the precedent it set — is not dead but dormant. And the sequel is being made in Silicon Valley, not Hollywood.

The Sony case, decided in 1984, stands for the principle that the makers of technology are not necessarily liable for its abuse. In that case, Sony vs. Universal Studios, Hollywood argued that this newfangled technology — the Betamax — threatened its business because it made it easier to illegally tape movies. It wanted the right to sue VCR makers for copyright infringement. But the court ruled that because VCRs were "capable of substantial non-infringing uses," their makers could not be held liable.

Fast-forward (or, if you prefer, scene-skip) to Monday. In MGM vs. Grokster, Justice David Souter, writing for the court, did not answer the question everyone thought he would — namely, whether trading music online is more or less similar to taping a movie on a VCR. Instead, he asked a completely different question: Do users download more Shakespeare or more Modest Mouse?

Put another way, the question is not so much whether the technology can be used legally, but how it is actually used. If it can be proved that its makers induced people to use it illegally, they can be held liable.

Proving whether someone induced someone else to do something wrong is never easy. (Though in this case, the court found ample evidence that Grokster had an "unlawful objective" of encouraging copyright infringement, or at least looking the other way.) It is entirely possible that, with this case, the court has just exchanged one difficult question for another.

It is also possible, however, that the court has found a way forward in a debate that means so much to California. Instead of suing anybody who comes up with a technology with the potential for illegal use, Hollywood will have to prove that the main purpose of that technology is piracy. And instead of defending innovation at all costs, Silicon Valley will have to show some responsibility.

It sounds like too much to hope for. Then again, the technology and entertainment industries have a history of working together almost despite themselves. The Sony Betamax, after all, never made Silicon Valley any money, but its progeny have been pretty good to Hollywood.