Popcorn Time and Grokster

Popcorn Time is an internet service recently gaining a lot of attention.  A lot of this attention is because of how simple Popcorn Time makes torrenting.  For those who don’t know, torrenting is a method of speeding up the downloading of large files.  It works by distributing the work of downloading to many users (colloquially referred to as a swarm), so that the entire swarm contributes to the process of downloading large files.  The data gathered by the swarm is then compiled by a client, such as BitTorrent or uTorrent.  Now, torrenting does have legal uses (such as distributing Linux distributions) but torrenting’s effectiveness in sharing large files made it a tempting method of sharing movies.

Popcorn Time’s strength is that it does most of the hard work on its own.  You simply select a movie you want to see, and Popcorn Time handles all of the potentially confusing aspects of torrenting.  You just click a button and the video plays.  That makes for an incredible program, but it also makes for some obvious legal issues.  If the ease of use (and press coverage) result in increased use, Popcorn Time is almost certainly going to hear from the MPAA’s attorneys.

For their part, Popcorn Time insists that they don’t have much to worry about from a legal standpoint.  According to TechCrunch, Popcorn Time legal defense lies in the fact that they don’t host the information themselves and that they don’t make money from their web service.  They also told Ars Technica that they have a dialog box warning that certain uses may be illegal in the user’s country.  Unfortunately, US law doesn’t inspire much confidence that they’re correct.

There are two cases that provide some basic guidance in this case: MGM v. Grokster (Grokster) and Arista Records v. LimeWire (LimeWire).  These cases deal with two different file sharing services from the post-Napster era.  Grokster was a person to person (P2P) filesharing service.  The issue in the Grokster case revolved around whether the Sony Betamax precedent (from Sony v. Universal) applied to Grokster.  The Sony Betamax case held that a court cannot hold a manufacturer liable for infringement if the devices they sold had substantial non-infringing uses and were sold for legitimate purposes.  The Supreme Court held that, in Grokster’s case, their technology encouraged copyright infringement and that Grokster promoted such infringement to their benefit.  Grokster also created the inducement test, which states that a company is liable for contributory infringement (helping facilitate the infringement of others) if their conduct encourages infringement.  As a result, Grokster could not claim protection under the Sony Betamax case.

The LimeWire case serves as one of the first major applications of Grokster’s inducement test.  The Supreme Court, in LimeWire’s case, found that LimeWire induced contributory infringement because 1. around 93% of the material on LimeWire’s servers infringed, 2. they were aware of the existence of a substantial number of infringing materials, 3. the company’s efforts assisted and enabled such infringement, 4. its business depended on infringement, and 5. LimeWire took no efforts to mitigate infringement.  The final point is particularly applicable to Popcorn Time.  LimeWire claimed that one of their attempts to mitigate infringement was to post a statement to users, reminding users that downloading copyrighted items is illegal and warning them not to use LimeWire for those purposes.  The Court found this not to represent an attempt to mitigate any benefits from users downloading copyrighted items.

There is one substantial difference between Popcorn Time and these other two cases: Popcorn Time is an open source project created by a group of programmers receiving no compensation for their efforts.  In both Grokster and LimeWire’s cases, the companies in question made money off the infringement.  There is no indication that anyone is making any money off Popcorn Time.  Both LimeWire and Grokster make it clear that financially benefiting from the infringement created by the service is a factor when determining inducement.  Whether that gets Popcorn Time off the hook by itself is an interesting question.  Another interesting question is the Popcorn Time’s open sourced nature and how that would affect standing and redressability (the ability of the court to actually right the alleged wrong).  As a point of reference, content holders have generally chosen to sue users or the torrent sites (like the Pirate Bay in Sweden) rather than the program developers.

For what it’s worth, Popcorn Time provides a neat service that clearly fills a niche.  Netflix’s Instant Streaming service shows that there is a big demand for a service that allows users to download or stream content in an easy to use manner.  In addition, one of the major complaints with Netflix is its “limited selection of movies, especially the latest releases.”  There is consumer demand for a service that gives users easy access to the latest movies.  That alone makes Popcorn Time a service worth following.

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