Following an unexpected reversal in April of last year of their worldwide legal sweep, the Cartel has just received a major setback from the 9th Circuit.

This story is ALL over the press and the blogs and more learned commentators will surely weigh in, but I couldn't let the opportunity pass.

A three-judge panel delivered a stinging rebuke to the Cartel's interpretation of the law and its larger agenda. I think it's interesting to compare vocabulary here:

First we have the justices cautioning against an "[exponential expansion] in the reach of the doctrines of contributory and vicarious copyright infringement."

The majority opinion (written by Judge Sidney Thomas) also goes to some pains to remind the Cartel that Betamax is still the decided law of the land. The phrase "...conflict with binding precedent..." is used, which I would read as Thomas saying that copyright is a Constitutional matter and since SCOTUS has spoken the Cartel can't just ask Congress to flip the laws around and have it wished away. Any attempt by the Cartel's Congressional sock puppets to redefine copyright would have to stand up to Constitutional scrutiny and, insofar as we have a precedent, a good prima facie argument could be made that such a law would be unconstitutional.

As many of the analysts have pointed out, the Thomas decision focuses on the factual basis. Here's how I read it:

• there are non-infringing uses for P2P


• Betamax doctrine holds that if there are such uses then the technology maker cannot be held liable


• DMCA's failure to recognize this doctrine conflicts with Constitutionally valid precedent and that trumps the law.

It's also worthy of note that the Thomas opinion eschews the use of the word "piracy" that has been so much in vogue lately. The word simply doesn't appear in the decision text at all, so far as I can see.

Put THAT in your pipe and smoke it.

The Cartel, on the other hand, still seem to be smoking the same crack pipe it has been hitting off of all along. Here we have Mitch Bainwol (the new RIAA CEO) blustering "This decision does nothing to absolve these businesses from their responsibility as corporate citizens to address the rampant illegal use of their networks." Actually, Mitch, that's pretty much PRECISELY what the decision does. In the same way that Xerox isn't responsible if you photocopy a book, and HP isn't responsible if you print out and sell bound copies of an e-book, Kazaa and Grokster really don't need to lose sleep about what their customers do with their tools.

Finally, a point of wishful thinking to Fred von Lohmann, attorney for the EFF, who asserts that this decision clears the way for other technologies such as ReplayTV that the Cartel have tried to smash. Wouldn't that be nice? Yes, and no it won't happen that way. The Cartel pay lots of good lawyers lots of good money to argue that existing precedent is irrelevant - see how they ignored Betamax in the first place. This decision is only binding in the 9th Circuit. Other jurisdictions might respect it. Or they might not. Certainly the Cartel has found no end of compliant trial judges up to now.

Which leads to the "what happens next" question. The Cartel haven't yet said whether they'll appeal. I believe the next step would be to request an en banc hearing from all of the 9th, which they might get, or move directly for cert from SCOTUS, which I believe would be denied. As I've said before, this Supreme Court does a very good job of dodging intellectual property cases and I don't see any compelling grounds to take this one over any others (but read below).

The Cartel also has to reason that the higher up they go the more binding the precedent would become. It's possible SCOTUS would decide to overturn Betamax and hand the Cartel the whole shooting match in one go. Or they might not. If they held that the Betamax doctrine was properly applied in this case that would be a truly major defeat and the Cartel has a history of backing away from situations where they think they'll lose.

Tim Wu, blogging in Lessig's blog, lists seven reasons why he thinks SCOTUS would grant cert. I think he's mostly full of it. His reasons 1 & 2 state that there's a conflict between the 9th and 7th Circuits. That's the one good reason I can see that they might. The rest of his reasons are just silly and ignore the fact that this court isn't prior courts and that two justices can't compel cert by themselves.

Wu's comments on the MGM v. Grokster decision are a bit more cogent. He highlights a potential weakness in the decision, where Thomas differs from
Posner's findings in the Aimster case. The issue, called "willful blindness," has to do with whether a company knowingly turns a blind eye to what's going on. In essence, if the Court finds that a company used technological choice (like system architecture) solely to execute an end run around the law, then the company can still be found guilty despite passing the "betamax test." Wu believes that this will be the linchpin of arguments before SCOTUS. Eh, mebbe. I'd bet a good dinner it won't.

Like many of the other commentators, I expect the Cartel will not appeal, and instead will shift gears for a while, trying to get new legislation through in the fall session of Congress. The Thomas opinion is a win, no doubt, but the Copyright Wars are far from over.

Trial case coverage:
Wired News article
c|net article

Current coverage:
Wired News article
c|net article
NY Times article
LA Times article

Decision:
FindLaw

The Blogsphere
http://www.corante.com/copyfight/archives/005752.html (et seq)
http://www.freedom-to-tinker.com/archives/000665.html
http://www.lessig.org/blog/archives/002103.shtml
http://www.lessig.org/blog/archives/002102.shtml

http://www.corante.com/importance/archives/005751.php (mostly links to other postings. Like I said, everyone and his brother weighing in)