June 27, 2005 | By Derek Slater

Unavoidable Inducement?

In light of the decision, some on the petitioners' side argue (once again) that the standard only targets "bad actors," not harming any legitimate businesses. However, in some ways, the decision may make it difficult for legitimate businesses to avoid inducement.

In the respondents' press conference, Grokster counsel Michael Page pointed out the perverse aspects of focusing on the P2P companies' attempting "to satisfy a known source of demand for copyright infringement." On the bright side, one could produce a tool that is used substantially for infringement but, because one did not intend to satisfy those users, one will not necessarily be liable. However, follow-on innovators who create similar products might be precluded; a court might conclude that they were attempting to satisfy that demand.

This problem for legitimate businesses runs even deeper. Ernest Miller provides a clever hypothetical:

"Suppose that there was ample evidence that Sony fully intended and explicitly encouraged Betamax users to infringe copyright with their videotape recorder (ads, internal emails, business plans). Consequently, under this standard, sales of the Betamax were shut down. What happens when VHS comes along? What will the makers of VHS have to do in order to avoid liability thanks to the bad actions of Sony? Should VHS be punished for going after the Betamax market? It would have been hard for VHS not to go after the Betamax market, that's where the buyers of VCRs are."

Plus, once such intent to induce is found, other factors like product design could become relevant. In light of their attempting to satisfy demand of former Napster users, Grokster's and Streamcast's failure to monitor their users was relevant to inducement. Ernest continues his hypothetical with this question: "[Is it] evidence of illicit intent that the VHS was built without broadcast flag technology?"

Ernest covers more ground on this score here.

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