The Post The Post

MGM v. Grokster WorldMGM v. Grokster World

New Rules for P2PNew Rules for P2P

P2P MEDIA SUMMIT NY

As litigation settlements continue in the wake of MGM v. Grokster, As litigation settlements continue in the wake of MGM v. Grokster, what other changes in the regulatory environment affecting P2P what other changes in the regulatory environment affecting P2P technologies do they presage? What will be the impact of the most technologies do they presage? What will be the impact of the most recent court opinions with respect to continuing advancement of P2P? recent court opinions with respect to continuing advancement of P2P? What else has to happen from a legal and policy standpoint to foster What else has to happen from a legal and policy standpoint to foster investment and robust commercial development of P2P?investment and robust commercial development of P2P?

Fritz AttawayFritz Attaway, EVP & Special Policy Advisor, , EVP & Special Policy Advisor, MPAAMPAA

Ray BeckermanRay Beckerman, , Vandenberg & Feliu LLPVandenberg & Feliu LLP

Steve MasurSteve Masur, Managing Partner, , Managing Partner, MasurLawMasurLaw

Dr. Nimrod KozlovskiDr. Nimrod Kozlovski, VP Strategy & Legal Affairs,, VP Strategy & Legal Affairs, Oversi Oversi

Joshua WattlesJoshua Wattles, Of Counsel, Entertainment Department, , Of Counsel, Entertainment Department, Dreier LLPDreier LLP

Moderator:Moderator:

Aydin S. CaginalpAydin S. Caginalp, Partner, Media and E-Commerce Group, , Partner, Media and E-Commerce Group, Alston & BirdAlston & Bird

P2P MEDIA SUMMIT NY

Aydin S. Caginalp – Alston & Bird

The Grokster DecisionThe Grokster Decision

One who distributes a device with One who distributes a device with the object of promoting its use to the object of promoting its use to infringe copyright, as shown by infringe copyright, as shown by clear expression or other clear expression or other affirmative steps to foster affirmative steps to foster infringement, is liable for the infringement, is liable for the resulting acts of infringement by resulting acts of infringement by third parties.third parties.

P2P MEDIA SUMMIT NY

Aydin S. Caginalp – Alston & Bird

Points Cited by the Supreme Points Cited by the Supreme CourtCourt

•Intention to attract 32 million former Napster users Intention to attract 32 million former Napster users (kit delivered to advertisers; similarity in name).(kit delivered to advertisers; similarity in name).•E mail stating: “[t]he goal is to get in trouble with the E mail stating: “[t]he goal is to get in trouble with the law and get sued. It’s the best way to get in the law and get sued. It’s the best way to get in the new[s].”new[s].”•No revenue from users, software distributed for free.No revenue from users, software distributed for free.•No effort to filter unauthorized copyrighted material.No effort to filter unauthorized copyrighted material.•Revenues derived solely from adware business Revenues derived solely from adware business model.model.

IN SHORT – THE COURT FOUND THAT GROKSTER SEEMED IN SHORT – THE COURT FOUND THAT GROKSTER SEEMED TO HAVE LITTLE VALUE FOR ANYTHING OTHER THAN TO HAVE LITTLE VALUE FOR ANYTHING OTHER THAN COPYRIGHT INFRINGEMENT.COPYRIGHT INFRINGEMENT.

P2P MEDIA SUMMIT NY

Aydin S. Caginalp – Alston & Bird

Important Limiting FactorsImportant Limiting Factors

•Mere knowledge of infringing potential or actual Mere knowledge of infringing potential or actual infringing users is not sufficient to create liability.infringing users is not sufficient to create liability.

•Ordinary acts incident to product distribution such as Ordinary acts incident to product distribution such as offering technical support, product updates are not offering technical support, product updates are not sufficient.sufficient.

•Mere failure to take affirmative steps to prevent Mere failure to take affirmative steps to prevent infringement, absent other factors, is insufficient to infringement, absent other factors, is insufficient to impose liability if a device is otherwise capable of impose liability if a device is otherwise capable of substantial non-infringing uses.substantial non-infringing uses.

PURPOSEFUL, CULPABLE EXPRESSION, AND CONDUCT ARE PURPOSEFUL, CULPABLE EXPRESSION, AND CONDUCT ARE NECESSARY TO CREATE LIABILITY. NECESSARY TO CREATE LIABILITY.

P2P MEDIA SUMMIT NY

Aydin S. Caginalp – Alston & Bird

What Does Grokster What Does Grokster Mean??•Entertainment industry failed to restrict the fair use Entertainment industry failed to restrict the fair use principles of earlier Sony decision.principles of earlier Sony decision.

•Supreme Court actually cited beneficial uses of P2P Supreme Court actually cited beneficial uses of P2P technology – absent malevolent intent.technology – absent malevolent intent.

•Decision requires care on the part of business and Decision requires care on the part of business and engineering developers to avoid sales based on engineering developers to avoid sales based on infringing use.infringing use.

•Intent is a significant and core element in assessing Intent is a significant and core element in assessing secondary liability for infringement.secondary liability for infringement.

P2P MEDIA SUMMIT NY

Aydin S. Caginalp – Alston & Bird

As litigation settlements continue in the wake of MGM v. Grokster, As litigation settlements continue in the wake of MGM v. Grokster, what other changes in the regulatory environment affecting P2P what other changes in the regulatory environment affecting P2P technologies do they presage? What will be the impact of the most technologies do they presage? What will be the impact of the most recent court opinions with respect to continuing advancement of P2P? recent court opinions with respect to continuing advancement of P2P? What else has to happen from a legal and policy standpoint to foster What else has to happen from a legal and policy standpoint to foster investment and robust commercial development of P2P?investment and robust commercial development of P2P?

Fritz AttawayFritz Attaway, EVP & Special Policy Advisor, , EVP & Special Policy Advisor, MPAAMPAA

Ray BeckermanRay Beckerman, , Vandenberg & Feliu LLPVandenberg & Feliu LLP

Steve MasurSteve Masur, Managing Partner, , Managing Partner, MasurLawMasurLaw

Dr. Nimrod KozlovskiDr. Nimrod Kozlovski, VP Strategy & Legal Affairs,, VP Strategy & Legal Affairs, Oversi Oversi

Joshua WattlesJoshua Wattles, Of Counsel, Entertainment Department, , Of Counsel, Entertainment Department, Dreier LLPDreier LLP

Moderator:Moderator:

Aydin S. CaginalpAydin S. Caginalp, Partner, Media and E-Commerce Group, , Partner, Media and E-Commerce Group, Alston & BirdAlston & Bird

P2P MEDIA SUMMIT NY

Aydin S. Caginalp – Alston & Bird