Caution Seen After Court Ruling

Posted June 29, 2005 at 6:43pm

After months of holding off lobbying as the Supreme Court mulled its decision on the Grokster case, entertainment and technology interests on opposite sides of the debate over Internet file-sharing services said this week that they would not be taking their fight to Capitol Hill.

Instead, lobbyists in both camps said that they want to see how lower courts interpret the unanimous ruling handed down Monday by the Supreme Court. The justices ruled that software companies could be held liable for copyright infringement if they market their products to users in such a way that it encourages them to steal protected content.

Most interests on both sides said they are happy enough with the decision that they won’t pressure Congress to strengthen it — or to roll it back.

“We believe everybody ought to take a deep breath and put a finger on the pause button,” said Mitch Bainwol, who as president of the Recording Industry Association of America helped lead Hollywood’s charge against software companies.

Likewise, lawyer Fred von Lohmann, who successfully argued the file-sharers’ case before the 9th Circuit Court last year, said it is “far too soon” to approach Congress.

He said the Supreme Court’s decision struck a balance that removed much of the urgency to seek a Congressional fix.

“If one side or the other lost big, there might be a huge immediate push for that,” he said. “I think everyone, including Congress, is tempted to let the courts work it out.”

Indeed, lawmakers said they did not expect to take up the issue soon.

Sen. Orrin Hatch (R-Utah) recently tried to broker a legislative compromise between entertainment and technology interests with a measure that would have cracked down on file-sharing networks. Called the Induce Act, it languished in committee last fall.

After the Supreme Court ruling, Hatch warned against a “rush to legislate” but left the door open for future action.

“Obviously if it appears that U.S. industries, technological innovation, or consumers are ultimately harmed by this decision, Congress should consider a legislative solution that appropriately balances consumer interests, innovation and intellectual property rights,” he said in a statement.

Not everyone, however, thinks that Congress should rest on its laurels now.

P2P United, the lobbying group for a half-dozen software companies including Grokster, will push lawmakers to consider requiring movie studios and music labels to accept collective licensing, the group’s executive director Adam Eisgrau said.

That arrangement, he said, would recognize the simple fact that more and more people will download copyrighted material off the Internet, while allowing the material’s authors to collect some money from the activity.

“We believe that Congress has an opportunity and responsibility to turn its attention now to how we can create a market in which all artists and copyright holders can be compensated,” he said.

Bainwol called Eisgrau’s a “shrill voice in the wilderness.”

“It’s time for those who profit on the backs of creators to come into the real world of commerce,” he said.

Regardless of whether legislation is forthcoming, both sides will get a chance to testify before Congress when Sen. John Ensign (R-Nev.), chairman of the Senate Republican High Tech Task Force, convenes hearings on the issue soon.

The emerging calm in the decision’s wake quiets what could have become a lobbying maelstrom over the issue. If the roster of groups that filed briefs to the Supreme Court in the case is any indication, lawmakers would have been hearing from interests even more far-flung than the entertainment and technology sectors.

Notably, the fight pit core Republican constituencies against each other. The Christian Coalition took the unlikely step of siding with Hollywood movie and music producers, arguing that file-sharing technology helped spread pornography. The American Conservative Union and the National Taxpayers Union, on the other hand, stood up for the software companies, since they oppose broadly expanding traditional copyright protections.