Japanese Court's Reversal in File-Sharing Case is a Clear Win for Software Innovators

A Japanese appeals court yesterday reversed a lower court ruling against file-sharing software developer Isamu Kaneko related to his "Winny" program. This ruling is a departure from recent rulings in both the US and Sweden, and clearly demonstrates that Japan's courts have an eye toward fostering innovation rather than protecting the status quo on behalf of content owners.

The criminal proceeding against Kaneko turned on the issue of whether the Winny program "encouraged" file-sharing and copyright infringement. This approach is directly analogous to the idea of contributory infringement here in the U.S. The doctrine of contributory infringement basically goes like this: If you know that your actions/products/etc. are used for infringing activity and you intentionally induce or encourage people to participate in the activity or use the product, you are also liable for any infringement that they commit. The case law in this area has been developing for over two decades, but was codified in 2005 by the Supreme Court in the landmark MGM v. Grokster case. However, it is the 1984 Sony Betamax case that provides an escape. In that case, the Supreme Court said that a product is not designed for contributory infringement as long as it has significant non-infringing uses. Yesterday's ruling from the Japanese high court clearly recognizes the goal of Sony, which is the continued encouragement of technological innovation.

Worldwide, the big content companies have seemed to fear this encouragement of technological innovation in the area of file-sharing. Rather, they have attempted to place civil and criminal liability upon file sharers, software developers and tracking site hosts in order to cut off the supply of unauthorized copies of music, movies, software, etc. Big Content has seemingly ignored the tack whereby they would become participants in the technological foot race and lead the next iteration of development in order to protect their own content without resort to legislation. The reversal of Kaneko's conviction demonstrates to Japanese content providers that the courts of that country are not going to be as cooperative as some other courts in policing file-sharing related copyright infringement if it means stifling innovation. This ruling is a clear win for software developers in that country and should be a strong signal to Big Content that - at least in Japan - their next move must come on the technological front rather than the legislative or judicial approaches employed to this point.

A Generation Lost: How the Music Industry Lost 30 Years or So of Income

A research study released today in Great Britain shows that, despite knowing that downloading music is illegal, young people 14-24 continue to download music by whatever technological means available (see original story below). These studies seem to pop up monthly, while the lobbyists and paid-for politicians on either side of the Atlantic try to legislatively put their fingers in the dike. The content industries need to realize that they have complacently fallen so far behind technologically that they simply cannot, and will not, recover their old business model for at least a generation.

For decades, consumers happily rushed to stores to buy the latest releases from their favorite bands. From Elvis to Bill Haley, Buddy Holly to the Rolling Stones to Nirvana to Blink-182, people wanted their tunes and they were willing to pay for them. The portable record player gave way to the car 8-track player. Enter the Walkman, and then the Discman. Then, in the late 1990's some inventive and intelligent folks outside the music industry realized a vast improvement in the solution to the music portability puzzle that had so clearly intrigued people over the previous generations. Along came MPEG Layer 3 technology - you know it as MP3 - and what was a stroll became a sprint en masse.

First players like the Rio took slow steps into market acceptance. Then the Yepp player did the same. More tech savvy citizens got into the mix and along came Napster. The sprint was now a rushing stream. Up went Internet bandwidth, along came Kazaa and the iPod...and then the stream became a torrent - Bit Torrent to be exact. Over the course of less than a decade, the content industries stood by, heads in the sand while technology created by individuals and corporations alike realized all of the ease-of-distribution dreams that the content industries had always dreamed of. Every person in the world could quickly receive a copy of what they had long been willing to pay for. They could take that copy with them anywhere they went - and they wanted to do so. And the content industries stood idly by, deer in headlights, heads in the clouds...the euphemisms go on and on.

Had the industry recognized the changing tide, they would have been able to harness the wave and ride it into an explosion of success and far greater distribution. But instead they turned their backs one year, fought with all their might the next, and shrugged their shoulders the next. What was left? An entire generation who was raised on free, easily distributed, easily duplicated music and movies. Music and movies that these consumers still want.

The content industries will not recover these consumers as paying customers. It simply won't happen. Well, unless they can come up with a technological methodology to put the genie back in the bottle. Suing customers has proven costly and ineffective. Occasional talk of "educational endeavors" to apprise young people of the copyright laws have gone nowhere. And legislation will only breed more cynicism, cost more money, and lead right back to suing or pushing for prosecution of customers.

The only answer is to use all of that money and might to develop new technologies that once again make the industries' products ones that the customer must buy if he or she wants to obtain it. Until then, customers - teens and twenty-somethings - who have grown up with free music and movies at their fingertips will have no reason to change their thinking. Try telling people that we're now going to drive on the left side of the road or that they will have to use coin-operated telephones at home. Simply put, it just doesn't compute. And for a whole generation who got loose from the gates while the industry snoozed, music will always be free and the old way simply won't make sense.

The content industries can regain their paying market. It just isn't going to happen in this generation unless they start being as smart as those who have slayed their previous model and develop another model that proves that paying for the music consumers love is a necessity, not an option.

Link: Original Times Online Story: Young people ignoring attempts to combat illegal music downloading