Internet | Law

June 29, 2005

Mark Cuban on Grokster, Redux

A Q&A with the Internet billionaire and Dallas Mavericks owner about the Supreme Court's ruling in the online-piracy case and whether he thinks his money was well-spent.

Carl Bialik

"I didn't care about Grokster the company, or Grokster the service. I cared about protecting technological innovation," Mark Cuban tells Gelf Magazine, in reacting to the Supreme Court's ruling Monday in MGM vs. Grokster.

At first glance, the decision—that online-file sharing services like Grokster and StreamCast may be sued if they encourage users to violate copyrights—may appear to be a defeat for Cuban, who helped fund Grokster's legal team. But Cuban, who also wrote about the decision on his blog, says the Supreme Court focused on how the technology was marketed, and not the technology itself. He also thinks that the ruling will stem any moves by Congress toward passing laws that could potentially be even more restrictive of technology.

In a series of emails Monday and Tuesday, Cuban spoke to Gelf about the case, why lawyers should be celebrating, and why one reaction to the ruling is "lame, brain-dead and foolhardy." Here's the exchange, edited for readability:

Gelf Magazine: What do you think of the outcome? You wrote back in March: "If Grokster loses, technological innovation might not die, but it will have such a significant price tag associated with it, it will be the domain of the big corporations only." Do you still feel this way? Is an era of digital McCarthyism upon us?

Mark Cuban: I haven't read the entire opinion yet. My first thought is that it protected Sony enough to protect innovation, while leaving the bad actors, people, companies and innovation who encourage copyright theft, out to dry. I don't have a problem with that. I didn't care about Grokster the company, or Grokster the service. I cared about protecting technological innovation. The great news in the decision, from what I can tell, is that it gave both sides something, which in turn should mean that the big content players shouldn't be able to use their lobbying power to create moronic laws like the Induce Act [A much-reviled bill that is no longer a legislative priority, according to] If that is the case, then I would consider this ruling enough of a win to make me happy.

GM: Some innovators say they worry they won't be able to afford to defend themselves against charges that their products are intended to induce piracy. Yet you apparently aren't concerned by that. Why is that?

MC: As I wrote in the blog, I fear that we will have to have our own version of Sarbanes-Oxley to prove that our technology wasn't marketed as an inducement to infringement and that the only people who gain are lawyers and the insurance industry.

GM: Why do you think the Induce Act is now dead?

MC: I think it would be tough for Induce to come back given the court says companies can sue if there is evidence of inducement. But again, I'm not a lawyer, that's just me surmising.

GM: Is this going to push the recording industry to try to reverse the Sony precedent? Will there be a deluge of lawsuits in the future?

MC: Lets hope not. I think they would have a hard time getting to the SCOTUS on Sony, but I'm no expert on the subject.

GM: Is this a major victory for the entertainment and recording industries?

MC: No. It's a major victory for lawyers everywhere. The entertainment industries didn't stop anyone or anything. The amount of illegal file-sharing didn't change a bit because of the ruling, nor will the industry be able to change anything as a result of the ruling. They just got the right to sue some people—Grokster et al—who don't have any money. That's not a victory.
They may take license and try to sue technology companies that they feel present a threat to them. Honestly, that will be worse than suing students and grandmothers because it will be obvious what they are trying to do and it will rally all the technology companies, venture capitalists, businesspeople, and entrepreneurs against them because of the inherent threat to their businesses.

GM: Were you happy with the way Grokster was represented? Do you think you got a return on your lawyer investment?

MC: I'm fine with it.

GM: On her blog, Chris Nolan wrote, "The Supreme Court has given geek determinism—the often adolescent belief that technology will triumph and that anything that stands in its way is lame, brain dead, foolhardy and stupid—a well-deserved smack upside the head." What do you think of that statement?

MC: It's lame, brain-dead and foolhardy.

David Goldenberg contributed to this article.

Related in Gelf

• Cuban spoke to Gelf back in March about his reasons for supporting Grokster.

• Before the ruling, Gelf legal commentator Aaron Zamost explained why online music piracy can't be eliminated in court.

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Article by Carl Bialik

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