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Supreme Court Decision on MGM v. Grokster

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Location: Washington, DC


SUPREME COURT DECISION ON MGM V. GROKSTER -- (House of Representatives - June 27, 2005)

The SPEAKER pro tempore (Mr. Kuhl of New York). Under a previous order of the House, the gentleman from California (Mr. Berman) is recognized for 5 minutes.

Mr. BERMAN. Mr. Speaker, I want to join with my colleagues, the gentleman from California (Mr. Schiff), the gentlewoman from California (Ms. Watson), the gentlewoman from California (Ms. Linda T. Sánchez), and a colleague who wanted to be here as well but could not be, the gentlewoman from California (Mrs. Bono), to react to a unanimous decision that came down today by the Supreme Court in the MGM v. Grokster case.

That ruling is a victory for American innovation. Artists will thrive, be encouraged to create the music and movies we love, and legitimate technology companies that distribute those same movies and music will no longer have to compete with piracy profiteers. Conversely, services that breed a culture of contempt for intellectual property will have to answer for their ill-gotten gains.

In addition to providing us with movies, sound recordings, computer games and software, books and other creative works, the core copyright industry accounts for over 6 percent of the U.S. gross domestic product. Businesses that rely on copyright employ more than 11 million U.S. workers. Unfortunately, the copyright piracy taking place over peer-to-peer networks has become a great threat to the livelihoods of all copyright creators. Therefore, robust protection for creativity is necessary to support everyone from the most famous artists to the completely unknown set designer, from shareholders and executives of studios and R&D record companies and software companies to the many thousands of hourly-wage earners who work for them.

Piracy robs creators and owners of sound recordings and movies of their right to be first in the market. But most harmful, peer-to-peer networks have created a culture where too many consumers, including our children, are accustomed to receiving their choice of entertainment anytime, anyplace, in any format for free, without providing the creator his or her rightful compensation.

In a 9-0 opinion, the Supreme Court has told businesses that facilitate copyright infringement that they will be held directly accountable for their actions. A business cannot model its success on the destruction of another's industry. To paraphrase Justice Kennedy's observation in the oral argument, unlawful expropriated property cannot be used by a business as part of its start-up capital.

This decision ``does nothing to compromise legitimate commerce or discourage innovation having lawful promise.'' It has merely found a balance between the legitimate demand of copyright owners for effective protection and the rights of others to engage in substantially unrelated areas of commerce. Just because the transmission of these files happened in the ether, does not mean that the protection should only be symbolic. Just because we are in a digital age, the definition of stealing does not change. If I go to a store and take a CD without paying for it, I am stealing. If I go to a peer-to-peer network and download a song for free, I am also stealing.

The Supreme Court has instructed businesses: ``You may not entice individuals to commit a moral and legal wrong.'' It is willing to hold businesses responsible for the part they play in promoting theft. It has issued a loud warning that companies will not be allowed to gain from illegal distribution. Those that specifically design their business models to target the demand for copyright infringement will be stuck wearing the bulls-eye.

Shed no tears: these illegitimate peer-to-peer networks are not innovators; they are free riders. Their services make it hard to teach our children about right and wrong. They send adware, spyware, viruses, and pornography on to our computers and into our homes. There are a great many reasons for parents, teachers, creators, and others to rejoice about the message the Supreme Court sent today.

Both the content and tech industry must continue developing innovative and legitimate ways to distribute content so that consumers can access entertainment on a variety of devices. This decision will improve opportunities for legitimate music and movie distribution, putting out of business the black marketeers.

This decision has provided greater protection for intellectual property rights and has provided the tools to effectively combat copyright theft. In turn, it will keep an engine of America's economic growth thriving by promoting innovation and creativity in entertainment and the arts. The decision is also a win for legitimate technology companies. Those who have structured their businesses to distribute content in innovative and legal ways that compensate the creator while providing consumers quality in choice should laud this decision.

The Founding Fathers dealt with pirates on the high seas and had the intuition to address the pirates over the air. They afforded protection in the Constitution for intellectual property rights that serve as the cornerstone of American innovation. The Supreme Court today has helped carry out the mission of article I section 8 of the Constitution by promoting the progress of science and the useful arts.

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