BitTorrent: Under Attack but Needed for Innovation

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Mininova, isoHunt, The Pirate Bay and other P2P sites are fighting out legal battles with the entertainment industry. Courts zealously document their contribution to copyright infringement. But copyright holders and courts ignore P2P’s vital role in fostering innovation. Professor of Law Michael Carrier explains why this has to change.

Guest post by Michael Carrier, Professor of Law at Rutgers Law School in Camden.

BitTorrent: Attacked by Copyright Holders, Crushed by Courts, but Needed for Innovation.

The Pirate Bay and other P2P sites continually find themselves on the defensive. Copyright holders repeatedly threaten and sue them. Courts zealously document their contribution to copyright infringement. But copyright holders and courts ignore P2P’s vital role in fostering innovation. I would like to change that.

In my book, Innovation for the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law, I examine (1) why copyright holders continually seek to quash new technologies, (2) why courts fail to appreciate P2P, and (3) why we should lament these developments.

First, I trace the long history of copyright holders reacting with alarm to new technologies that threaten their business models. John Philip Sousa bemoaned the introduction of the player piano, which would lead to “a marked deterioration in American music.” Jack Valenti warned that the market for copyrighted movies would be “decimated, shrunken [and] collapsed” by the VCR. And the recording industry, lamenting a decline in CD sales, has sued numerous P2P services.

In fearing the potential of the new business models, copyright holders offer a classic example of market leaders that fail to appreciate disruptive innovation. A decade ago, the recording industry responded to Napster, which was striving to be “the online distribution channel for the record labels,” not by striking a deal that would have seamlessly transported the industry into the digital era, but by suing it. While the record labels may have won the battle in shutting down Napster, they began to lose the war, as former users migrated to other P2P networks.

Nor are copyright holders the only ones that fail to appreciate the new technologies. Courts also do. Why? Because of an innovation asymmetry. Courts downplay the future benefits of new technologies and overemphasize copyright owners’ present losses. Copyright owners offer evidence of losses from infringement on a silver platter.

In contrast, non-infringing uses are less tangible. It is difficult to put a dollar figure on the benefits of enhanced communication and interaction. And when a new technology is introduced, no one knows all of the beneficial uses to which it will eventually be put. I offer numerous examples of this (including, just to pick two, the telephone, which Alexander Graham Bell thought would be used to broadcast the daily news, and the phonograph, which Thomas Edison thought would “record the wishes of old men on their death beds”). This asymmetry, combined with costly litigation (which ensnares small technology makers in a web of complex tests and unaffordable lawsuits) explains why courts do not sufficiently appreciate P2P.

This lack of appreciation threatens innovation. As this site’s readers are well aware, BitTorrent and other P2P protocols offer revolutionary forms of interaction and distribution. By breaking up large files into many small pieces, BitTorrent speeds up transfer, allowing the distribution of numerous works, such as home movies, independent films, TV shows, video games, educational videos, computer software, and high-resolution images. Just a few of many examples discussed on this site that have utilized BitTorrent include (1) computer manufacturer Asus, which offers fast, cheap software updates, (2) the airing of a high-definition movie in Norway, and (3) FrostWire’s offering of a service that promotes music of new artists.

Courts’ failure to appreciate P2P and BitTorrent threatens to stifle the development of new business models that attempt to free participants from the shackles of traditional distribution methods. Independent artists would find it much more difficult to break away from mainstream record labels if they lacked an inexpensive method of rapidly and widely distributing their work. Independent filmmakers would no longer be able to reach the masses, instead having to rely on boutique movie theaters or direct DVD mailings.

And of course, we can only see the tip of the P2P innovation iceberg. To pick two of countless examples, in my book I explore potential P2P benefits in providing alternatives to the Google search engine and cloud computing.

In short, the trend—as typified by developments such as the Pirate Bay decision, Malaysia’s order to shut down the tracker LeechersLair, exorbitant statutory damage awards, and various “three strikes” legislative proposals—is to clamp down ever harder on any technology that could contribute in any way to copyright infringement. But in squeezing technologies in this infringement vise, courts and copyright holders threaten to suffocate P2P innovation.

Michael’s book ‘Innovation for the 21st Century: Harnessing the Power of Intellectual Property and Antitrust Law’ is available on Amazon.


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