On Friday (May 20th), I moderated a debate on Grokster at a joint annual meeting of the San Francisco and Los Angeles IP associations in Palm Springs. It was 105 degrees: appropriately for the temperature, on the panel were Judge Alex ("Easy Rider") Kozinski of the Ninth Circuit (and one of the Article III Groupie's Super Hotties), Stanley Pierre-Louis, Director of Litigation for the RIAA (and top on anyone's list of people you would want to hang out with), and Michael Page, who represented Grokster at the lower court level.
In November, at the Copyright Society of the U.S.A. in New York, I had moderated a similar debate between Judge Kozinski and Judge Posner, billed as the "Transylvanian Terminator versus the Chicago Crusher." That bill lived up to its name. It was a wild, wildly amusing, over-the-top, mano-a-mano theoretical combat between two of our most insightful judges. Judge Kozinski's libertarian streak was on full display, and that had the effect of making Judge Posner appear very conventional. The Kozinski-Posner debate took place before the oral argument in Grokster and in Palm Springs I was interested to see how the oral argument might have changed crystal ball looks at the outcome before the Supreme Court.
I tried to set an appropriate tone in Palm Springs by wearing my Buttshark t-shirt, but the rudeness of the deadly-boring speaker before us in not ending anywhere near on time (droning on in yet another useless Power Point presentation consisting entirely of text that was read verbatim), and the absence of Judge Posner had the effect of dampening Judge Kozinski's naturally infectious nature. Presumably too, beating up on lawyers poses an unfair advantage for him, as well as being a bit of a busman's holiday.
The bottom line Palm Springs crystal ball for the Supreme Court's outcome was this: unlike past Supreme Court opinions, where one would race to the end to read "reversed" or "affirmed" (the last rare in the case of the 9th Circuit, but cf. Stewart v. Abend in which the Supreme Court favored the 9th Circuit over the 2d Circuit), in Grokster the view expressed was that such a label would be of considerably less consequence. One reason for this is that a reversal is unlikely (in my opinion), so the spin will be over the nature of the affirmance (if that is what happens).
I say this under the assumption that the inducement part of the case is in large part not (and maybe not at all) before the Court as a discrete ground. That is, if it is true that had the Court not granted certiorari there would still be a proceeding before the trial court on past alleged inducement conduct ("use our software and please commit copyright infringement") then the Court can't "reverse" on inducement grounds, and that was the most likely ground for reversal, in my opinion.
Indeed, while there was confusion on this point at oral argument, the real focus was on the "Sony" part of the case, i.e, the staple article of commerce problem. On this central point, there are a number of problems, and I note that both sides moved for summary judgment so the idea that the Sony part would be sent back for trial is unlikely.
The Court could reverse under any approach adopted. The Court could affirm the result (no liability), apply a "straight" Sony test (whatever that is) but trash the Ninth Circuit's interpretation of Sony)(which I expect, and think is a trashing well-deserved). The Court could modify Sony to fit the Internet. Or, the Court could announce new standards (hence Scalia's admonition to forget about stare decisis). Under either of these last two, the court could vacate in light of the new standards and ask the Ninth Circuit to reconsider, but given the summary judgment posture I don't see why they would do that rather than decide the case themselves, unless they thought summary judgment shouldn't have been granted at all. Justice Souter might have that view, given his statement that it was bizarre to separate the inducement part of the case. And it is entirely possible that enough Justices have discomfort with the posture of the case and the state of the record that such an approach provides an easier route than dumping it because "we made a mistake in taking this case" or the 4 to 4 split in Lotus v. Borland. If I were voting, I would attempt to craft a modified Sony test, vacate the summary judgment, and tell the parties to fill in the gaps in the record.
Aside from questions about the posture of the case, much of the oral argument centered around what "test" to use. The copyright owners' didn't help themselves by not helping the Court. Here are some excerpts from the transcript of questions asked the copyright owners' counsel: Justice Kennedy: "It's not clear to me from your brief what your test is" (p. 9); after an effort to explain one, Justice Kennedy then stated, "Well, I don't quite understand." (p. 15); Justice Souter, after trying to pin counsel down: "You're not answering the question." (p. 15); Justice Scalia on counsel's confusing the inducement and the Sony arguments: "I think that's your second argument. I thought you were going to stick with the first one. I mean, that's an inducement argument," to which Justice Souter added, "Yeah, that's inducement" (p. 16). Justice O'Connor, adopting Capitol Hill lingo, straight out announced, "I don't understand your pitch." (p. 17).
The P2Ps' counsel was much more direct, advocating application of the "clear" Sony test, which got him in trouble with Justice Ginsburg, who found the test far from clear. But at least the Justices knew where he stood. Unfortunately for him, it is probably not a place that will command 5 votes, and some, such as Justice Kennedy, were downright hostile.
Where does this leave the Court? Acting like common-law judges, which is to say making law, and by themselves, not in public, which is why I thought before cert. was granted that the Court was a dangerous venue for the copyright owners. My belief, expressed for many months before the argument, was that there are not five votes for reversal, but not five votes for applying Sony for a straight affirmance, and instead a murky area in between, murky enough that neither side will be able to declare a full victory and therefore not enough to require Congressional intervention either. The lawyer panelists in Palm Springs agreed this is a possible scenario, after of course expressing optimism for a decisive victory.
Judge Kozinski favored Congressional guidance. Leaving aside the unlikelihood that Congress would get involved after a murky decision, I question how much guidance Congress can give. Certainly Congress can resolve discrete issues, like the split between the 7th and 9th Circuits over whether one looks to present uses or whether one can factor in possible future ones. Congress can also flesh out the knowledge requirement (but how is an intensely political issue even more than a drafting one). Beyond that, unless there is to be a detailed DMCA safe-harbor-like exemption (and that is as likely as the Democrats developing a backbone), there is little Congress can do that will be of help in future cases.
In short, the area may well remain as murky as it is now.