Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In a pair of cases this week, the Supreme Court has a chance to dramatically shape the way that many people use and get on the Internet. Scheduled for argument Tuesday are MGM Studios Inc. v. Grokster Ltd. and StreamCast Networks Inc., which could decide whether peer-to-peer downloading of songs and movies violates copyright, and National Cable & Telecommunications Association v. Brand X Internet Services, a struggle to determine which regulatory regime should govern cable Internet services. “They are two cases that will have huge meaning for the technological development of the country,” says Arthur Brodsky of the group Public Knowledge, which advocates for broad public access to technology. Both cases have attracted top intellectual property and telecommunications lawyers from firms around the country, eager to be in on what could be landmarks in the unpredictable history of the digital age. The cases have brought together odd bedfellows — in Grokster, the Christian Coalition is siding with Hollywood moguls — and will bring to the Court lectern an interesting assortment of powerhouse lawyers, all but one of them a former high court law clerk: � Donald Verrilli Jr., the Jenner & Block partner and former William Brennan Jr. clerk who has played a dominant role in nearly every telecommunications case before the Court in recent years, will argue in favor of copyright protection for the movie and music industries in the Grokster case. � Opposite Verrilli will be Richard Taranto, whose low-tech D.C. firm Farr & Taranto doesn’t even have a Web site. The former clerk for Justice Sandra Day O’Connor will argue on behalf of high-tech Grokster and StreamCast that their file-sharing software does not violate copyright. � Paul Cappuccio, the former law clerk to Antonin Scalia and Anthony Kennedy who is now executive vice president and general counsel of Time Warner, will argue on behalf of the cable industry in the Brand X case. It is rare for in-house counsel for such a large company to drop everything and argue before the Court, but Cappuccio was determined to argue against telecommunications-style regulation for cable modem service. � Thomas Goldstein of D.C.’s Goldstein & Howe will counter Cappuccio on behalf of Brand X. Goldstein is making his third argument this term and the 14th of his career. Goldstein once blogged from inside the Supreme Court building while he listened to oral arguments in the lawyers’ lounge. A Court official requested he not do it again, and Goldstein complied. � Acting Solicitor General Paul Clement, a former Scalia clerk, will argue along with Verrilli in the Grokster case, while Deputy Solicitor General Thomas Hungar will appear along with Cappuccio in the Brand X case. Hungar was a Kennedy clerk in 1988, the same year as Cappuccio. HOLLYWOOD KNIGHTS The Grokster case has gotten the most attention, with entertainers and creative artists — including a certified class of 27,000 songwriters and music publishers — casting it as a life-or-death struggle over theft of their means of livelihood. Peer-to-peer downloading, which enables computer users to download files from other computers rather than from a central source, has led to the theft of copies of 85 million songs and 400,000 movies a day, says Mark Corallo, a former Justice Department spokesman who is working for entertainment industry groups in the case. The industry says it has lost billions in revenues. “It’s no different from putting a CD in your knapsack at Target and walking out of the store,” says Corallo. The 9th Circuit last August acknowledged that a “vast majority” of the downloads violate copyright law, but because there are also “substantial noninfringing uses,” Grokster and StreamCast should not be held liable unless it could be shown that they knew about the infringement. The ruling was based on the Supreme Court’s 1984 case Sony Corp. v. Universal City Studios Inc. — a similar entertainment industry challenge to new technology — which held that makers of VCRs weren’t liable for violating the copyright of movie studios so long as the technology was capable of “substantial” legal uses. In Grokster, the 9th Circuit said that, as with VCRs, the software has legal uses, including downloading music by artists who don’t object to file sharing. Verrilli’s task will be to convince the high court that the 9th Circuit interpreted Sony incorrectly and that Sony does not countenance such intentional and massive infringement. “Infringement is its business, and [ Sony] does not provide it immunity,” Verrilli asserts. But Grokster and its allies say the entertainment industry in fact is asking the Court to overturn Sony, which it is unlikely to do, partly because it does not reverse its own rulings lightly and partly because Sony has worked. Instead of ruining the movie industry by allowing VCRs to be used for playing movies, the Sony decision fostered a lucrative new market for Hollywood through videotapes and now DVDs. “The content industry is not very good at forecasting the future uses of its products,” says Annette Hurst, co-chair of the intellectual property practice at Howard Rice Nemerovski Canady Falk & Rabkin in San Francisco. She has no direct role in Grokster, but represented Napster, a Grokster precursor that was shut down for copyright violations. Hurst also points to a brief before the Court in Grokster that suggests the entertainment industry is crying wolf about file sharing. “Speculative and, at best, minimal” is how economists Felix Oberholzer-Gee and Koleman Strumpf describe the damage to the music industry thus far caused by free downloading. Album sales actually increased in 2004 after a three-year dip, they point out. Arguing for Grokster will be Taranto, a leading high court practitioner with 18 arguments under his belt. StreamCast’s lawyer, Charles Baker of Porter & Hedges in Houston, led the search for the right oral advocate. “It was difficult to give up the reins, but we needed the special expertise that we couldn’t bring to the table,” says Baker. “This is a big-deal case.” The list of possible advocates was short, Baker says, because of the conflicts faced by lawyers whose firms are working for parties on the other side. “It seems like every firm in the United States is in on this one,” Baker says. Taranto has done more patent than copyright work, but Baker is pleased with the pick. He says he panicked slightly when he did a Google search on Taranto and discovered he had no Web site. “I said to people at my firm, ‘Hey, guys, we have a problem here.’ ” But at the Supreme Court level, the argument will be about the scope of the Sony rule, not about the details of the technology. “We needed a fresh take on this argument, and we are very impressed with his work,” Baker says. For his part, Taranto says, “We’ve never seen the need for a Web site. We are a two-person firm.” INDUSTRY BLUES Entertainment industry briefs contend that downloading has had a devastating effect. “The impact of internet piracy on professional songwriters has been staggering,” wrote Carey Ramos of Paul, Weiss, Rifkind, Wharton & Garrison in New York, in a brief on behalf of the class of songwriters and publishers. Ramos estimates that downloading could cost clients as much as $2.6 billion annually in lost royalties. The brief quotes Senate Majority Leader Bill Frist (R-Tenn.) as saying that when he returns to Nashville his “heart sinks” to see all the “for sale” signs on buildings housing recording studios and music companies along Music Row. But Grokster advocates think these pleas won’t go very far with the Supreme Court. “The industry is telling the Court, ‘We’re in a crisis, and you have to do something,’ ” says Mike Godwin, lawyer for Public Knowledge. “ I feel for some of these companies, but jurisprudentially, that isn’t what the Court does.” Still, the industry has powerful allies — including the federal government, which argues that Grokster can be found liable for infringement under either Sony or general principles of contributory or secondary liability under copyright law. Also joining the entertainment industry are some traditional foes — Christian and child advocacy organizations as well as law enforcement groups that usually rail against Hollywood. “We are really very unstrange bedfellows when you recognize we share the same goal in this area,” says former George W. Bush Justice Department official Viet Dinh, author of the brief for these groups, including the Christian Coalition and the Fraternal Order of Police. “We are concerned about the anarchic nature of these peer-to-peer downloads and how they avoid the law.” Dinh’s brief asserts that peer-to-peer downloading is “becoming the preferred method to transfer child pornography.” One current running through some of the briefs in Grokster is the citation of work by Columbia University Law School professor Jane Ginsburg, a copyright expert and advocate who is the daughter of Justice Ruth Bader Ginsburg. All but one of the briefs citing her work are on the MGM side of the case. “Is this like the duck blind? I hope not,” says San Francisco lawyer Hurst, referring to the recusal issue raised last year by Justice Scalia’s duck-hunting trip with Vice President Dick Cheney while Cheney was a named party in a case pending before the Court. Asked about the recusal issue, a Court spokeswoman cited a 1993 statement signed by Ginsburg and six other justices with close relatives who were or might someday become lawyers. In that statement, the justices indicated they would recuse only if close relatives were lead counsel in the case below or had a financial arrangement that would increase their income depending on the outcome of their firm’s case before the Court. Several people who know Jane Ginsburg say she purposely stays arm’s length from cases before the Court, declining to write or participate directly in copyright-related briefs. But she can’t stop parties from citing her publications. “I think she follows all the rules,” says Godwin of Public Knowledge, which supports Grokster. “It would be a bit strange if she had been studiously ignored in the briefs” on MGM’s side. Jane Ginsburg did not respond to phone messages or e-mails over the last two weeks seeking comment on her relationship to the Grokster case. ACCESS CARDS The second case to be argued on Tuesday is devoid of the entertainment industry dazzle of Grokster, but could have substantial impact as well. More than 18 million homes use cable lines for Internet access. The cable industry is challenging another 9th Circuit ruling, this one from 2003, that said cable modem service should be classified as a “telecommunications service,” which, as with phone lines, would mean that cable companies would have to provide other providers with access to their lines. The ruling overturned an earlier Federal Communications Commission determination that the cable industry preferred: that cable modems are an “information service” akin to dial-up Internet service, subject to little regulation. Internet services including Brand X and Earthlink, joined by access advocates including the Center for Digital Democracy, claim that the cable industry will stifle access if its able to defeat “telecommunications service” status. They argue that cable consumers should be able to choose their own Internet service provider rather than be forced to use the cable company as the Internet provider. “Without regulations treating cable modem service as a common carrier telecommunications service, cable companies can leverage ownership of the physical infrastructure into control of citizens’ access to and use of the Internet,” says a brief on behalf of the American Civil Liberties Union and the Brennan Center for Justice. “This threatens free speech and privacy.” But the cable industry and its supporters argue that the FCC determination deserves deference and does not stifle competition for broadband Internet access. “There is no dominant broadband provider today,” says Andrew McBride, a D.C. partner at Wiley Rein & Fielding who filed a brief for Verizon and other companies that support the FCC rule, in part so that DSL providers can claim the same classification. McBride describes the market as “vibrantly competitive,” noting that cable companies hold about a 60 percent share of the broadband market, with DSL, satellite, wireless, and even electric utility companies also in the ballgame. “Let a thousand flowers bloom,” he says.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.