Clearing the Fog Surrounding Internet File Sharing?

Abstract

In its (in)famous decision against Grokster and Streamcast the Supreme Court managed to sidestep the fundamental issues of copyright in the information age and focused on a generic bad faith standard and obscure business models instead.

This short article provides an introduction to fundamental questions of indirect liability for copyright infringement under US law and follows the trail of decisions leading up to the confusing Supreme Court opinion (including Aimster and Napster). It analyzes the arguments made and briefly discusses possible implications for the interest groups involved.

The paper concludes that file sharing is still a dubious, but not illegal business and that all important questions remain open even after the ruling. All parties involved can feel both worried and assured by the decision, but no one can claim a decisive victory (yet). The clear line between the Consumer Electronics (and Software) industry and the Entertainment business divides not only the state of California, but the Supreme Court bench as well.

Note: Downloadable document is in German.

Keywords: filesharing, napster, grokster, aimster, kazaa, emule, supreme court, sony, morpheus, copyright, secondary liability, itunes

JEL Classification: K11, K39, Q34