Grokster: Victory for P2P

Despite what you might hear from TV news, which gets its information from press releases, today’s ruling in the Grokster case is a pretty big win for peer-to-peer file sharing, and a blow to the entertainment industry.

Yes, the Court ruled against Grokster and StreamCast, which the RIAA and MPAA are touting all over the airwaves. It sounds bad for file sharing… until you actually read the ruling.

I’m going to go into much more detail in my USA Today column this Friday, but the gist is this: The ruling was very, very narrow, and said that Grokster and StreamCast specifically could be held responsible for illegal use of their networks.

But file-sharing as a whole did not suffer a blow.

In fact, the reason Grokster and StreamCast are in trouble is because they encouraged piracy — they were not innocent bystanders. (For example, they made money by selling advertising.)

Companies and groups making file-sharing software that does not encourage piracy are, according to this ruling, in the clear.

Yes, they can be sued; they don’t enjoy complete immunity the way VCR makers do. But the entertainment companies will have to prove not that piracy is done, but that the software makers encouraged it.

So expect to see lots of disclaimers (e.g., “Do not use this software to share music illegally!”), but that’s about it.

More to come.