Fwd: Pho: How litigation only spurred on P2P file sharing

About time somebody wrote a book on this!




How litigation only spurred on P2P file sharing
By Rebecca Giblin on Nov 11, 2011 12:30 PM (1 day 10 hours ago)
Filed under Telco/ISP

Analysis: Did the content industry lose the legal battle?

Do you remember back in 2001 when Napster shut down its servers? US
courts found Napster Inc was likely to be liable for the copyright
infringements of its users. Many of Napster's successors were also
shut down.

Aimster and its controversial CEO were forced into bankruptcy, the
highest court in the US strongly suggested that those behind Grokster
and Morpheus ought to be held liable for "inducing" their users to
infringe, and Kazaa's owners were held liable for authorisation by our
own Federal Court. Countless others fled the market in the wake of
these decisions with some, like the formerly defiant owners of
Bearshare and eDonkey, paying big settlements on the way out.

By most measures, this sounds like an emphatic victory for content
owners. But a funny thing happened in the wake of all of these
injunctions, shutdowns and settlements: the number of P2P file sharing
apps available in the market exploded.

By 2007, two years after the US Supreme Court decided Grokster, there
were more individual P2P applications available than there had ever
been before. The average number of users sharing files on file sharing
networks at any one time was nudging ten million and it was estimated
that P2P traffic had grown to comprise up to 90 percent of global
internet traffic. At that point content owners tacitly admitted
defeat, largely abandoning their long-time strategy of suing key P2P
software providers and diverting enforcement resources to alternatives
like graduated response or "three strikes" laws.

Why is it that, despite being ultimately successful in holding
individual P2P software providers liable for their users'
infringement, content owners' litigation strategy has failed to bring
about any meaningful reduction in the amount of P2P development and

Physical vs digital

I would argue pre-P2P era law was based on a number of "physical
world" assumptions. That makes sense, since it evolved almost
exclusively with reference to physical world scenarios and
technologies. However, as it turns out, there is often a gap between
those assumptions and the realities of P2P software development.

Four such physical world assumptions are particularly notable in
explaining this phenomenon.

The first is that everybody is bound by physical world rules. Assuming
this rule had universal application, various secondary liability
principles evolved to make knowledge and control pre-requisites to
liability. But software has no such constraint. Programmers can write
software that will do things that are simply not possible or feasible
in the physical world. So once the Napster litigation made P2P
programmers aware of the rules about knowledge and control, they
simply coded Napster's successors to eliminate them – something no
provider of a physical world distribution technology ever managed to

In response, the US Supreme Court in Grokster created a brand new
legal doctrine, called inducement, that did not rely on either
knowledge or control. That rule was aimed at capturing "bad actors" -
those P2P providers who aimed to profit from their users' infringement
and whose nefarious intent was demonstrated by "smoking guns" in their
marketing and other communications. But the inducement law failed to
appreciate some of the other differences that make the software world
special and thus led directly to the explosion in the number of P2P
technologies. In understanding why, three other physical world
assumptions come into play.

One is that it is expensive to create distribution technologies that
are capable of vast amounts of infringement. Of course in the physical
world, the creation of such technologies, like printing presses,
photocopiers, and VCRs required large investment. Research and
development, mass-manufacturing, marketing and delivery all require
massive amounts of cash. Thus, the law came to assume that the
creation of such technologies was expensive.

That led directly to the next assumption – that distribution
technologies are developed for profit. After all, nobody would be
investing those massive sums without some prospect of a return.

Finally comes the fourth assumption: that rational developers of
distribution technologies won't share their secrets with consumers or
competitors. Since they needed to recoup those massive investments,
they had no interest at all in giving them away.

All of these assumptions certainly can hold up in the software
development context. For example, those behind Kazaa spent a lot on
its development, squeezed out the maximum possible profit and kept its
source code a closely guarded secret. By creating a law that focused
on profits, business models and marketing, the Supreme Court succeeded
in shaking out Kazaa and its ilk from the market.

But the Court failed to appreciate that none of these things are
actually necessary to the creation of P2P file sharing software. It
can be so inexpensive to develop that some university programming
courses actually require students to make an app as part of an
assignment. When the software provider puts in such a small
investment, there's much less need to realise a profit. This, combined
with widespread norms within the software development community
encouraging sharing and collaboration, also leads to some individuals
making the source code of their software publicly available for others
to adapt and copy.

When the US Supreme Court created its new law holding P2P providers
liable where they "fostered" third party infringement, as evidenced by
such things as business models, marketing and internal communications,
the result was an enormous number of programmers choosing to create
new applications without any of those liability attracting elements.
In the absence of any evidence that they had set out to foster
infringement, they could not be liable for inducement, and having
coded out of knowledge and control they could not be held liable under
the pre-P2P law either.

The end result? The mismatch between the law's physical world
assumptions and the realities of the software world meant that the law
created to respond to the challenges of P2P file sharing led to the
opposite of the desired result: a massive increase in the availability
of P2P file sharing software. The failure of the law to recognise the
unique characteristics of software and software development meant the
abandonment of the litigation campaign against P2P providers was only
a matter of time.

Dr Rebecca Giblin is a member of Monash University's law faculty in
Melbourne. Her new book Code Wars tells the story of the decade-long
struggle between content owners and P2P software providers, tracing
the development of the fledgling technologies, the attempts to crush
them through litigation and legislation, and the remarkable ways in
which they evolved as their programmers sought ever more ingenious
means to remain one step ahead of the law. The book explains why the
litigation strategy against P2P providers was ultimately unsuccessful
in bringing about any meaningful reduction in the amount of P2P
development of infringement.

Visit codewarsbook.com where you can read the first chapter in full.
Physical copies can be ordered online from stores like Amazon and Book
Depository, and electronic copies are available via Google books at a
heavily discounted price.

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