Not everyone knows this but, by now, the richest man in the world should be a
Brit. In the late 1980s, and working from a cluttered laboratory in the Swiss
Alps, London-born scientist Sir Tim Berners-Lee invented the world wide web.
The countless billions lost, and massive fortunes made, during the dotcom
boom years of the late ’90s would not have occurred without his brilliant vision
to create a network where research papers could be shared.
Why is this important? Late last month, one of the most significant court
hearings of recent times finally came to an end in the MGM v Grokster case. The
result sent shockwaves through the technology world.
The landmark case, heard in the US Supreme Court, resulted in the judges
unanimously siding with MGM’s argument that Grokster, a file-sharing software
maker, should be held legally responsible for consumers that use its software to
share copyrighted material illegally. By producing software that could help
users download pirated material, Grokster had committed a mortal sin in the eyes
of the entertainment industry.
Although similar to Napster – the original file-sharing technology that
clogged up most company networks when their staff spent all day downloading
music – Grokster is different. This difference is proof of the traditional
business world’s inability to fully grasp the idea of a world wide web.
Napster was shut down because it owned servers that acted as a central
database of the hard drive locations of pirated music that could be downloaded
for free by anyone who used their (free) software. It was a clear-cut case. But
Grokster is far more difficult to call. The US judges unanimously sided with
MGM, not because the software could be used for illegal purposes but because
they felt the company was deliberately marketing its software as a way for users
to download illegal, pirated media.
While I am loathe to criticise film and music industry attempts to protect
their assets and profits, the Grokster ruling is worth a second glance as it has
thrown into doubt every industry that manufactures products that could
conceivably be used for illegal purposes.
Pursuing Grokster so vehemently is like using a sledge hammer to crack a nut,
and the US courts may find that they have bitten off more than they can chew
with this particular decision as companies struggle to determine what the true
implications are. Would, for example, the victim of a car crash, where the
driver at fault was exceeding the speed limit, be justified in pursuing the car
manufacturer for damages? They could conceivably argue that many car adverts
play on the fact that their machines make a mockery of the 70mph speed limit.
In 2001 Apple, the California-based maker of the Macintosh, launched an
aggressive ad campaign it called ‘Rip. Mix. Burn.’ It was a rather obvious, but
compelling, play on the rewriteable CD drive that came with its latest Mac, and
its ability to copy CDs. Theoretically, this could fall foul of the judges’
opinion in the Grokster ruling.
It is this grey area that has split the business world and led the likes of
Intel, AT&T and Sun Microsystems to lend their support to Grokster. They,
along with many others, understand that file-sharing technology is here to stay
and can play a vital role in the future of business.
Perhaps more importantly, the Grokster ruling is another threat to the
culture of innovation that exists on the web. Although a completely alien
concept to many business people, some of the best innovation comes about despite
a complete lack of profit motivation. Stifling that culture is a threat to what
could arguably be seen as the most important revolution since the industrial
Consider this. In 1982, then head of the Motion Picture Association of
America, Jack Valenti, launched a scathing attack on the newly launched video
tape recorder. “The VCR is to the American film producer and the American public
as the Boston strangler is to the woman home alone,” he said. Of course, it
didn’t end up like that, and the VCR provided a hugely lucrative revenue stream
for the film industry and spawned a video rental shop on what seems like every
It was around the same time that Valenti was making his comments that Sir Tim
started work on the web and what would become the ultimate file-sharing network.
His vision has since created a thousand millionaires, and the odd billionaire.
Without him there would be no eBay, no Google, no AOL Time Warner, and
PartyGaming would not be sitting in the FTSE-100 index. Food for thought.