[Congressional Record (Bound Edition), Volume 151 (2005), Part 10]
[House]
[Pages 14384-14385]
[From the U.S. Government Publishing Office, www.gpo.gov]




            INTELLECTUAL PROPERTY AND THE GROKSTER DECISION

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from California (Ms. Linda T. Sanchez) is recognized for 5 
minutes.
  Ms. LINDA T. SANCHEZ of California. Mr. Speaker, I rise to applaud 
the United States Supreme Court for their ruling today in the case of 
Metro-Goldwyn-Mayer Studios, Incorporated v. Grokster. By a unanimous 
ruling, 9-0 in favor of MGM, the Supreme Court sent a strong message 
today that our courts will protect the work of creative artists.
  I represent the 39th Congressional District in California. My State, 
region, and district are home to the motion picture industry, the music 
industry, and software companies. Many of my constituents work in these 
creative industries, and I know from talking to them that piracy hits 
their companies hard and their pocketbooks harder.
  Intellectual property is important to our economy as a whole, so 
copyright infringements also severely damage our national economy. In 
fact, according to the International Intellectual Property Alliance, in 
2002, core copyright industries accounted for over 6 percent of the 
U.S. gross domestic product. That is over $626 billion. When you look 
at all copyright industries, they accounted for approximately 12 
percent of the U.S. gross domestic product, or $1.25 trillion in 2002 
alone.
  Obviously, intellectual property is a vital part of our economy, and 
piracy robs our economy of billions of dollars from this important 
industry.

                              {time}  2030

  Conservative estimates say that counterfeiting of U.S. businesses' 
copyrighted goods cost our economy between $200-$400 billion each year. 
When our economy suffers like that, America's workers suffer, too.
  The ``core'' copyright industries alone were estimated to have 
employed 4 percent of U.S. workers in 2002, a total of 5.48 million 
workers. But piracy causes 750,000 American workers to lose their jobs 
each year.
  This is where intellectual property laws come in and why the Supreme 
Court decision today in the Grokster is so important. The Court drew a 
line in the sand in the Grokster case and said that peer-to-peer file-
sharing networks that encourage illegal file-sharing should not be 
shielded by our laws. The ruling protects the creative community but 
also allows the public to retain access to the benefits of peer-to-peer 
file-sharing technology.
  Mr. Speaker, I love movies and music as much as any consumer, and I 
use

[[Page 14385]]

computer software every single day. I am also a fan of the Internet, 
and I want consumers to be able to use technology to get their favorite 
music and movies conveniently.
  But stealing is stealing. Swapping copyrighted files online is 
illegal, and just because it is easy doesn't make it right. We can have 
peer-to-peer networks that give every American access to the files they 
want online, and also provide creators with copyright protections.
  As long as companies like Grokster are allowed to facilitate illegal 
file swapping, we will continue to lose hundreds of dollars and 
hundreds of thousands of U.S. jobs each year.
  I am pleased that the Supreme Court took the first step today in 
Grokster towards ending illegal copyright infringement online, and 
protecting the industries that produce copyrighted works.
  Mr. CONYERS. Mr. Speaker, today's ruling is a victory for content 
creators and consumers. It is clear that those who encourage content 
theft are responsible for their conduct even if they themselves are not 
stealing. With this ruling, creators will be encouraged to take 
advantage of the digital marketplace and provide consumers with even 
more digital content.
  For years, consumers have been clamoring for access to digital 
content. Because content protection technology and content owners had 
not caught up with the Internet, music lovers turned to illegal 
download sites like Napster and Kazaa for digital content.
  We had heard that, if the content industry would just create a legal 
avenue for obtaining digital music, consumers would embrace it. The 
premonition was largely true. The record industry and high-tech worked 
together to develop digital content protection, to clear the rights 
needed to get music online, and to get music on the Internet. According 
to the Pew Internet and American Life Project, the response to 
legitimate digital content has been overwhelming: in 2004, only twenty-
four percent of music downloaders had tried legitimate download sites; 
in 2005 to date, the number jumped to forty-three percent.
  Internet sites like Apple iTunes, Napster, and Rhapsody offer 
consumers a variety of ways of obtaining music, from one-time downloads 
to monthly subscriptions. In just the past few years, over 300 million 
songs were sold on just a single website. No matter how you view it, 
the marketplace is working.
  Today's Supreme Court decision makes it clear that encouraging others 
to steal is as nefarious as stealing directly. I have no doubt that, 
with this added assurance, content creators will roll out even more 
digital content to consumers.
  Mr. ENGEL. Mr. Speaker, I rise to join my Democratic colleagues in 
support of protecting our Nation's intellectual property. For decades 
the theft of music and movies has been commonplace. But, with the 
explosion of the Internet, the theft of copyright material has become a 
crisis.
  Just today, the Supreme Court, in an unanimous decision, stepped 
forward and protected Intellectual Property. In MGM v. Grokster, the 
Supreme Court struck a fine balance that must exist to ensure 
consumers' rights and protect music and video content. The Court 
clearly stated that ``the record is replete with evidence that from the 
moment Grokster and Streamcast began to distribute free software, each 
one clearly voiced the objective that recipients use it to download 
copyrighted works, and each took active steps to encourage 
infringement.'' Neither of these programs offered themselves as 
legitimate devices such as a VCR. A great majority of users knew and 
intended to subvert copyright and deny not just the record and movie 
companies' compensation, but take money out of the pockets of 
songwriters, studio personnel, camera men and make-up artists.
  We are also undertaking an effort to move to digital television. In 
the future, if the Congress does not act, copying and uploading a 
broadcast show will be all too easy. Many of us have worked on the 
``Broadcast Flag,'' which is a technology that will allow consumers to 
continue to record a show for later viewing, but prevent the mass 
redistribution. The Federal Communications Commission had instituted a 
rule to this end, but the federal courts found the FCC lacked such 
authority. Thus, it falls on us in Congress to continue to update our 
laws in the digital era to stop copyright infringement. I hope we can 
do so quickly or, I fear, the best entertainment will be moved to cable 
and satellite and be unaffordable to some Americans.
  I thank Mr. Hoyer and Mr. Schiff for arranging this effort and 
applaud all of my colleagues' commitment to the protection of one of 
our Nation's most valuable assets.
  Mr. HOYER. Mr. Speaker, I rise today in support of the Supreme 
Court's decision on Monday, June 27 in Metro-Goldwyn-Mayer Studios, 
Inc. v. Grokster, Ltd.
  In a rare 9-0 decision, the Court found ``that one who distributes a 
device with the object of promoting its use to infringe copyright, as 
shown by clear expression or other affirmative steps taken to foster 
infringement, is liable for the resulting acts of infringement by third 
parties.''
  Grokster and other companies that proactively enable the theft of 
creative and other protected works should immediately cease this 
activity.
  MGM Studios v. Grokster is much more than a legal battle involving 
movie studios, record labels and the technology community. Grokster is 
fundamentally about ensuring that the creative and copyrighted works of 
millions of Americans who enrich our lives--including songwriters, 
musicians, screen writers and other artists--are appropriately 
protected in this era of rapid technological advancement.
  I acknowledge that artists, as well as movie studios and record 
labels, have been the beneficiaries of the same creative energy of the 
technology community that has given consumers new products, such as DVD 
players and portable music devices. Clearly, technological advancements 
have fostered the enjoyment of these creative works.
  There must be a balance between protecting the copyrighted works of 
artists and ensuring technological innovation. However, the unbridled 
theft of copyrighted works must be stopped, as the Supreme Court has so 
clearly repudiated this activity. The Court struck the right balance in 
protecting copyrighted material and innovators in the technology 
community. It is time for those who created a business model dependent 
upon infringement to adjust to this new legal standard.

                          ____________________