The Post MGM v. Grokster World New Rules for P2P P2P MEDIA SUMMIT NY

As litigation settlements continue in the wake of MGM v. Grokster, what other changes in the regulatory environment affecting P2P technologies do they presage? What will be the impact of the most recent court opinions with respect to continuing advancement of P2P? What else has to happen from a legal and policy standpoint to foster investment and robust commercial development of P2P? Fritz Attaway, EVP & Special Policy Advisor, MPAA Ray Beckerman, Vandenberg & Feliu LLP Steve Masur, Managing Partner, MasurLaw Dr. Nimrod Kozlovski, VP Strategy & Legal Affairs, Oversi Joshua Wattles, Of Counsel, Entertainment Department, Dreier LLP Moderator: Aydin S. Caginalp, Partner, Media and E-Commerce Group, Alston & Bird P2P MEDIA SUMMIT NY Aydin S. Caginalp – Alston & Bird

The Grokster Decision One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps to foster infringement, is liable for the resulting acts of infringement by third parties. P2P MEDIA SUMMIT NY Aydin S. Caginalp – Alston & Bird

Points Cited by the Supreme Court Intention to attract 32 million former Napster users (kit delivered to advertisers; similarity in name). Intention to attract 32 million former Napster users (kit delivered to advertisers; similarity in name). E mail stating: “[t]he goal is to get in trouble with the law and get sued. It’s the best way to get in the new[s].” E mail stating: “[t]he goal is to get in trouble with the law and get sued. It’s the best way to get in the new[s].” No revenue from users, software distributed for free. No revenue from users, software distributed for free. No effort to filter unauthorized copyrighted material. No effort to filter unauthorized copyrighted material. Revenues derived solely from adware business model. Revenues derived solely from adware business model. IN SHORT – THE COURT FOUND THAT GROKSTER SEEMED TO HAVE LITTLE VALUE FOR ANYTHING OTHER THAN COPYRIGHT INFRINGEMENT. P2P MEDIA SUMMIT NY Aydin S. Caginalp – Alston & Bird

Important Limiting Factors Mere knowledge of infringing potential or actual infringing users is not sufficient to create liability. Mere knowledge of infringing potential or actual infringing users is not sufficient to create liability. Ordinary acts incident to product distribution such as offering technical support, product updates are not sufficient. Ordinary acts incident to product distribution such as offering technical support, product updates are not sufficient. Mere failure to take affirmative steps to prevent infringement, absent other factors, is insufficient to impose liability if a device is otherwise capable of substantial non- infringing uses. Mere failure to take affirmative steps to prevent infringement, absent other factors, is insufficient to impose liability if a device is otherwise capable of substantial non- infringing uses. PURPOSEFUL, CULPABLE EXPRESSION, AND CONDUCT ARE NECESSARY TO CREATE LIABILITY. P2P MEDIA SUMMIT NY Aydin S. Caginalp – Alston & Bird

What Does Grokster ? What Does Grokster Mean? Entertainment industry failed to restrict the fair use principles of earlier Sony decision. Entertainment industry failed to restrict the fair use principles of earlier Sony decision. Supreme Court actually cited beneficial uses of P2P technology – absent malevolent intent. Supreme Court actually cited beneficial uses of P2P technology – absent malevolent intent. Decision requires care on the part of business and engineering developers to avoid sales based on infringing use. Decision requires care on the part of business and engineering developers to avoid sales based on infringing use. Intent is a significant and core element in assessing secondary liability for infringement. Intent is a significant and core element in assessing secondary liability for infringement. P2P MEDIA SUMMIT NY Aydin S. Caginalp – Alston & Bird

As litigation settlements continue in the wake of MGM v. Grokster, what other changes in the regulatory environment affecting P2P technologies do they presage? What will be the impact of the most recent court opinions with respect to continuing advancement of P2P? What else has to happen from a legal and policy standpoint to foster investment and robust commercial development of P2P? Fritz Attaway, EVP & Special Policy Advisor, MPAA Ray Beckerman, Vandenberg & Feliu LLP Steve Masur, Managing Partner, MasurLaw Dr. Nimrod Kozlovski, VP Strategy & Legal Affairs, Oversi Joshua Wattles, Of Counsel, Entertainment Department, Dreier LLP Moderator: Aydin S. Caginalp, Partner, Media and E-Commerce Group, Alston & Bird P2P MEDIA SUMMIT NY Aydin S. Caginalp – Alston & Bird