Justices turn eyes on Net file-sharing

WASHINGTON — The much-heralded Supreme Court showdown between old-fashioned entertainment and new-fangled technology on Tuesday found the justices surprisingly responsive to warnings from Grokster, the software maker that allows Internet users to share computer files on peer-to-peer networks, that a broad definition of copyright infringement could curtail innovation.

Justice David H. Souter asked Donald B. Verrilli, Jr., the lawyer arguing for the Hollywood studios and the recording industry, to envision "a guy sitting in his garage inventing the iPod."

"I know perfectly well that I can buy a CD and put it on my iPod," Souter said. "But I also know if I can get music without buying it, I'm going to do so."

Since that was so obvious, he continued: "How do we give the developer the confidence to go ahead? On your theory, why isn't a foregone conclusion from the outset that the iPod inventor is going to lose his shirt?"

That Souter, the least technically minded of the justices — he still drafts his opinions by hand on a legal pad — could suggest that he could be tempted to engage in illegal file-sharing was an indication of how this confrontation of powerful interests had engaged the court.

But by the end of the lively argument pitting Grokster and its allies against the entertainment community, any prediction about what the court will decide appeared perilous. The justices seemed taken aback by the procedural complexities of the case, Metro-Goldwyn-Mayer Studios v. Grokster Ltd., which moved through the lower federal courts on summary judgment, without a trial.

Some appeared tempted by the prospect of allowing the studios and record companies to get to trial on a legal theory that the lower courts did not address: that Grokster and the other defendant, StreamCast Networks, are liable for copyright infringement for having actively induced consumers to use their software to download copyrighted material on an immense scale.

The federal district court in Los Angeles, took a different approach, ruling that the file-sharing networks were not liable because their services were "capable of substantial non-infringing uses."

The Supreme Court also Tuesday:

• Ruled 5-4 that the Title IX gender equity law shields whistleblowers who accuse academic institutions of discrimination based on sex.

• Ruled 8-1 that Indian tribes can't expand their tax-exempt holdings by buying up property that has been outside their reservations for generations.

• Heard arguments on whether cable-based broadband is a "telecommunications service" under Federal Communications Commission rules that would require cable companies to open their lines to Internet competition.

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Contributing: Associated Press