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'''''MGM Studios, Inc. v. Grokster, Ltd.''''', 545 U.S. 913 (2005), is a [[Supreme Court of the United States|United States Supreme Court]] decision in which the Court unanimously held that the defendants, [[peer-to-peer file sharing]] companies [[Grokster]] and [[Streamcast]] (maker of [[Morpheus (software)|Morpheus]]), could be sued for inducing [[copyright infringement]] for acts taken in the course of marketing file sharing software.<ref name=":0">{{ussc|name=MGM Studios, Inc. v. Grokster, Ltd.|volume=545|page=913|year=2005}}. {{Include-FedCourts}}</ref> The plaintiffs were a consortium of 28 of the largest entertainment companies (led by [[Metro-Goldwyn-Mayer]] studios).
'''''MGM Studios, Inc. v. Grokster, Ltd.''''', 545 U.S. 913 (2005), is a [[Supreme Court of the United States|United States Supreme Court]] decision in which the Court ruled unanimously that the defendants, [[peer-to-peer file sharing]] companies [[Grokster]] and [[Streamcast]] (maker of [[Morpheus (software)|Morpheus]]), could be held liable for inducing [[copyright infringement]] by users of their [[file sharing]] software.<ref name=":0">{{ussc|name=MGM Studios, Inc. v. Grokster, Ltd.|volume=545|page=913|year=2005}}. {{Include-FedCourts}}</ref> The plaintiffs were a consortium of 28 entertainment companies, led by [[Metro-Goldwyn-Mayer]] studios.


== Background ==
== Background ==


Entertainment industry lawsuits against new technologies that enable the copying of copyrighted content date back to the 1980s, when the movie industry sought court [[Injunction|injunctions]] against the sale and use of VCRs. In ''[[Sony Corp. v. Universal City Studios]],''<ref>{{ussc|name=Sony Corp. v. Universal City Studios|volume=464|page=417|pin=|year=1984}}.</ref> the U.S. Supreme Court ruled that a technology manufacturer cannot be held liable for users' copyright infringement if widespread unauthorized copying is unlikely, and if the technology enables non-infringing uses as well.<ref>{{Cite book|url=https://books.google.com/books?id=1T4GAAAAQBAJ|title=Media and Entertainment Law|last=Towers|first=Sandi|date=2008-05-05|publisher=Cengage Learning|isbn=978-1111798642|language=en}}</ref>
Entertainment industry lawsuits against new technologies that enable the copying of copyrighted content date back to the 1980s, when the movie industry sought court [[Injunction|injunctions]] against the sale and use of [[Videocassette recorder|VCR]]<nowiki/>s. In ''[[Sony Corp. v. Universal City Studios]],''<ref>{{ussc|name=Sony Corp. v. Universal City Studios|volume=464|page=417|pin=|year=1984}}.</ref> the U.S. Supreme Court ruled that a technology manufacturer cannot be held liable for its users' copyright infringement if widespread unauthorized copying is unlikely, and if the technology enables significant non-infringing uses as well.<ref>{{Cite book|url=https://books.google.com/books?id=1T4GAAAAQBAJ|title=Media and Entertainment Law|last=Towers|first=Sandi|date=2008-05-05|publisher=Cengage Learning|isbn=978-1111798642|language=en}}</ref>


The advent of [[file sharing]] in the late 1990s, and its enabling of easy and more widespread copying of copyrighted materials, inspired new arguments from the entertainment industry, as copying technology had progressed since the 1980s. The ''Sony'' precedent was partially modified in ''[[A&M Records, Inc. v. Napster, Inc.|A&M Records v. Napster]]'' (2001), which addressed the ease of sharing music files online, and how the designers of the technology could be held liable for [[contributory copyright infringement]]. Just a few years later, Internet technology had progressed to the point that trading large video files, including those for entire movies, had become viable via popular services including [[Grokster]].<ref>{{Cite journal |last=Gregorian |first=Jamie |date=2009 |title=Grokster, BitTorrent, Copyright infringement, and Inducement: How Modus Operandi Can Provide a Functional Standard for Future File-Sharing Cases |journal=Texas Review of Entertainment & Sports Law |volume=10 |issue=2 |pages=145-168 |via=HeinOnline}}</ref>
The advent of [[file sharing]] via the Internet in the late 1990s, and its enabling of easy and more widespread copying of copyrighted materials, inspired new arguments from the entertainment industry, because copying technology had progressed since the 1980s. The ''Sony'' precedent was partially modified in ''[[A&M Records, Inc. v. Napster, Inc.|A&M Records v. Napster]]'' (2001), which addressed the ease of sharing music files online, and how the designers of the technology could be held liable for [[contributory copyright infringement]] and [[Vicarious liability|vicarious copyright infringement]] if such behavior was the primary use of the technology and the company benefited from it.<ref>''A&M Records, Inc. v. Napster, Inc.,'' [https://scholar.google.com/scholar_case?case=14102696336550697309&q=239+F.3d+1004&hl=en&as_sdt=6,39 239 F.3d 1004] (9th Cir., 2001).</ref>


The ''Grokster'' case is frequently characterized as a re-examination of the issues in ''Sony'' precedent, in light of rapidly progressing technologies and consumer behaviors. MGM and the other plaintiffs argued that makers of file sharing technology should held liable for their users' copyright infringements. In ''Sony,'' the court held that a copying technology could not be barred if it was "capable of substantial noninfringing uses."<ref name=":0" />
Just a few years later, Internet technology had progressed to the point that trading large video files, including those for entire movies, had become viable via popular services including [[Grokster]].<ref>{{Cite journal |last=Gregorian |first=Jamie |date=2009 |title=Grokster, BitTorrent, Copyright infringement, and Inducement: How Modus Operandi Can Provide a Functional Standard for Future File-Sharing Cases |journal=Texas Review of Entertainment & Sports Law |volume=10 |issue=2 |pages=145-168 |via=HeinOnline}}</ref> The ''MGM v. Grokster'' case is frequently characterized as a re-examination of the issues in ''Sony'' precedent, in light of rapidly progressing technologies and consumer behaviors. MGM and the other plaintiffs argued that makers of file sharing technology should held liable for their users' copyright infringement, via the contributory and vicarious infringement doctrines.<ref name=":0" />


The entertainment companies appealed to the Supreme Court after losing at two lower courts. The [[United States District Court for the Central District of California]] originally dismissed the case in 2003, citing the ''Sony'' precedent.<ref>{{cite court |litigants=MGM Studios, Inc. v. Grokster, Ltd. |vol=259 |reporter=F. Supp. 2d |opinion=1029 |court=C.D. Cal. |date=2003 |url=https://law.justia.com/cases/federal/district-courts/FSupp2/259/1029/2362925/ |access-date=2018-03-26 }}</ref> On appeal, the [[Ninth Circuit Court of Appeals]] upheld the district court's decision after acknowledging that peer-to-peer ("P2P") software has legitimate and legal uses.<ref>{{cite court |litigants=MGM Studios, Inc. v. Grokster, Ltd. |vol=380 |reporter=F.3d |opinion=1154 |court=9th Cir. |date=2004 |url=https://law.justia.com/cases/federal/appellate-courts/F3/380/1154/533557/ |access-date=2018-03-26 }}</ref>
The entertainment companies appealed to the Supreme Court after losing at two lower courts. The [[United States District Court for the Central District of California]] originally dismissed the case in 2003, citing the ''Sony'' precedent.<ref>{{cite court |litigants=MGM Studios, Inc. v. Grokster, Ltd. |vol=259 |reporter=F. Supp. 2d |opinion=1029 |court=C.D. Cal. |date=2003 |url=https://law.justia.com/cases/federal/district-courts/FSupp2/259/1029/2362925/ |access-date=2018-03-26 }}</ref> On appeal, the [[Ninth Circuit Court of Appeals]] upheld the district court's decision after acknowledging that peer-to-peer ("P2P") software has legitimate and legal uses.<ref>{{cite court |litigants=MGM Studios, Inc. v. Grokster, Ltd. |vol=380 |reporter=F.3d |opinion=1154 |court=9th Cir. |date=2004 |url=https://law.justia.com/cases/federal/appellate-courts/F3/380/1154/533557/ |access-date=2018-03-26 }}</ref>


Computer and Internet technology companies such as [[Intel]], and trade associations including firms such as [[Yahoo!]] and [[Microsoft]], filed ''[[amicus curiae]]'' briefs in support of the file sharing companies, while the [[Recording Industry Association of America|RIAA]] and [[Motion Picture Association of America|MPAA]] both sided with MGM. [[Napster]], having lost its [[A&M Records, Inc. v. Napster, Inc.|similar lawsuit]] about its users' contributory copyright infringement, filed a brief in support of the copyright owners.<ref>A list of briefs filed in the case is available at [http://www.copyright.gov/docs/mgm/ copyright.gov] and [https://www.eff.org/IP/P2P/MGM_v_Grokster/ eff.org] {{webarchive|url=https://web.archive.org/web/20081011114548/http://eff.org/IP/P2P/MGM_v_Grokster |date=2008-10-11 }}.</ref> Billionaire [[Mark Cuban]] partially financed Grokster's fight before the Supreme Court.<ref>{{cite news|url=http://news.cnet.com/Mark+Cuban+to+finance+Grokster+defense/2100-1032_3-5641530.html |title=Mark Cuban to finance Grokster defense |date=2005-03-27 |first=Steven |last=Musil |access-date=2006-07-20 |publisher=CNET |archive-url=https://archive.today/20120715215133/http://news.cnet.com/Mark-Cuban-to-finance-Grokster-defense/2100-1032_3-5641530.html |archive-date=2012-07-15 |url-status=dead }}</ref>
Computer and Internet technology companies such as [[Intel]], and trade associations including firms such as [[Yahoo!]] and [[Microsoft]], filed ''[[amicus curiae]]'' briefs in support of the file sharing companies, while the [[Recording Industry Association of America|RIAA]] and [[Motion Picture Association of America|MPAA]] both sided with MGM and the other entertainment companies. [[Napster]], having lost its [[A&M Records, Inc. v. Napster, Inc.|similar lawsuit]] about its enabling of users' copyright infringement, filed a brief in support of the entertainment companies.<ref>A list of briefs filed in the case is available at [http://www.copyright.gov/docs/mgm/ copyright.gov] and [https://www.eff.org/IP/P2P/MGM_v_Grokster/ eff.org] {{webarchive|url=https://web.archive.org/web/20081011114548/http://eff.org/IP/P2P/MGM_v_Grokster |date=2008-10-11 }}.</ref> Billionaire [[Mark Cuban]] partially financed Grokster's legal battle.<ref>{{cite news|url=http://news.cnet.com/Mark+Cuban+to+finance+Grokster+defense/2100-1032_3-5641530.html |title=Mark Cuban to finance Grokster defense |date=2005-03-27 |first=Steven |last=Musil |access-date=2006-07-20 |publisher=CNET |archive-url=https://archive.today/20120715215133/http://news.cnet.com/Mark-Cuban-to-finance-Grokster-defense/2100-1032_3-5641530.html |archive-date=2012-07-15 |url-status=dead }}</ref>


=== Oral arguments ===
=== Oral arguments ===
Line 44: Line 44:
The opinion of the court was authored by [[David Souter|Justice Souter]], who wrote: "We hold 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."<ref name=":0" />
The opinion of the court was authored by [[David Souter|Justice Souter]], who wrote: "We hold 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."<ref name=":0" />


While the Court unanimously concurred that Grokster could be liable for inducing copyright infringement, there was considerable disagreement over whether the case is substantially different from the ''Sony'' case, and whether the precedent established by ''Sony'' should be modified. On the one hand, Justice Ginsburg, joined by Kennedy and Rehnquist, claimed that "[t]his case differs markedly from ''Sony''" as there was insufficient evidence of uses which were non-infringing. On the other hand, Justice Breyer, joined by Stevens and O'Connor, claimed "a strong demonstrated need for modifying ''Sony'' (or for interpreting ''Sony''<nowiki/>'s standard more strictly) has not yet been shown," primarily because "the nature of ... lawfully swapped files is such that it is reasonable to infer quantities of current lawful use roughly approximate to those at issue in ''Sony''." These justices concurred in the judgment on the narrow ground of Grokster's alleged inducement of its customers to use the product illegally.<ref name=":0" />
While the Court unanimously held that Grokster could be liable for inducing copyright infringement, [[Concurring opinion|concurring opinions]] by several of the Justices showed considerable disagreement over whether the case is substantially different from the ''Sony'' precedent, and whether that precedent should be modified. On the one hand, Justice Ginsburg, joined by Kennedy and Rehnquist, claimed that "[t]his case differs markedly from ''Sony''" as there was insufficient evidence of non-infringing uses of the technology.<ref name=":0" /> On the other hand, Justice Breyer, joined by Stevens and O'Connor, claimed "a strong demonstrated need for modifying ''Sony'' (or for interpreting ''Sony''<nowiki/>'s standard more strictly) has not yet been shown," primarily because "the nature of ... lawfully swapped files is such that it is reasonable to infer quantities of current lawful use roughly approximate to those at issue in ''Sony''." These justices concurred in the judgment on the narrow ground of Grokster's alleged inducement of its customers to use the product illegally.<ref name=":0" />


The majority of the Justices would have either expanded or contracted the ''Sony'' precedent. However, the Court as a whole did not choose to reexamine the ''Sony'' precedent in the decision, being split into three equal groups. Thus the ''Sony'' ruling was reviewed only as necessary to properly detail the issues involved in this case. Justice Souter noted: "in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the ''Sony'' safe harbor."<ref name=":0" />
In the ''Grokster'' ruling, the Courtas a whole did not reach a decision to formally overturn the ''Sony'' precedent, and instead partially applied it to the specific issues raised by the Grokster and Streamcast technologies. Justice Souter noted: "in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the ''Sony'' safe harbor."<ref name=":0" /> Thus, the ''Grokster'' ruling was limited to the specific technologies at issue in the case.


== Subsequent developments ==
== Subsequent developments ==
The ''Grokster'' decision has been hailed by legal researchers as striking a fair balance between the need to respect the copyrights of artists, and the benefits of allowing and promoting technological innovation. Conversely, others have criticized the decision for its apparent vagueness, contending that it permits financially powerful organizations such as the [[Recording Industry Association of America|RIAA]] and [[Motion Picture Association of America|MPAA]] to effectively hinder development of new technology by active pursuit of litigation against the developers and distributors.<ref name="NYT">{{cite news | first =Tom, Jr. | last =Zeller |author2=Roben Farzad |author3=Saul Hansell| url =https://www.nytimes.com/2005/06/28/technology/28peer.html?pagewanted=1&ei=5090&en=41f5ea71b5f92739&ex=1277611200&adxnnl=1&partner=rssuserland&emc=rss&adxnnlx=1153411907-IhDfRpnMphZzBY9s4J9HUA | title =Sharing Culture Likely to Pause but Not Wither | work =The New York Times| date = 2005-06-28| access-date =2006-07-20}}</ref>
The ''Grokster'' decision has been hailed by legal researchers as striking a fair balance between the need to respect the copyrights of artists, and the benefits of allowing and promoting technological innovation. Conversely, others have criticized the decision for its apparent vagueness, contending that it permits financially powerful organizations like the [[Recording Industry Association of America|RIAA]] and [[Motion Picture Association of America|MPAA]] to effectively hinder development of new technology by actively engaging in litigation against the developers and distributors of new technologies.<ref name="NYT">{{cite news | first =Tom, Jr. | last =Zeller |author2=Roben Farzad |author3=Saul Hansell| url =https://www.nytimes.com/2005/06/28/technology/28peer.html?pagewanted=1&ei=5090&en=41f5ea71b5f92739&ex=1277611200&adxnnl=1&partner=rssuserland&emc=rss&adxnnlx=1153411907-IhDfRpnMphZzBY9s4J9HUA | title =Sharing Culture Likely to Pause but Not Wither | work =The New York Times| date = 2005-06-28| access-date =2006-07-20}}</ref>


On November 7, 2005 Grokster announced that it would no longer offer its peer-to-peer file sharing service. The notice on their website said, "The United States Supreme Court unanimously confirmed that using this service to trade copyrighted material is illegal. Copying copyrighted motion picture and music files using unauthorized peer-to-peer services is illegal and is prosecuted by copyright owners."<ref>{{cite web|url=http://www.grokster.com|title=Grokster|access-date= 2006-07-20|publisher= Grokster}}</ref> As part of acivil lawsuit permitted by this Supreme Court ruling, Grokster was forced to pay $50 million to the music and movie industries.<ref>{{cite news|url=http://news.cnet.com/Last+waltz+for+Grokster/2100-1027_3-5937832.html |title=Last waltz for Grokster |first=John |last=Borland |date=2005-11-07 |access-date=2006-07-20 |publisher=CNET |archive-url=https://archive.today/20120711115423/http://news.cnet.com/Last-waltz-for-Grokster/2100-1027_3-5937832.html |archive-date=2012-07-11 |url-status=dead }}</ref> Stating in 2008, visitors the Grokster website (www.grokster.com) encounter this message: "Your [[IP address]] is (your ip) and has been logged. Don't think you can't get caught. You are not anonymous."<ref>{{cite web|url=http://www.grokster.com |title=Grokster website |access-date= 2008-10-24 |publisher=Grokster}}</ref>
On November 7, 2005 Grokster announced that it would no longer offer its peer-to-peer file sharing service.<ref>{{cite web|url=http://www.grokster.com|title=Grokster|access-date= 2006-07-20|publisher= Grokster}}</ref> As part of a civil lawsuit enabled by this Supreme Court ruling, Grokster was forced to pay $50 million to various companies in the music and movie industries.<ref>{{cite news|url=http://news.cnet.com/Last+waltz+for+Grokster/2100-1027_3-5937832.html |title=Last waltz for Grokster |first=John |last=Borland |date=2005-11-07 |access-date=2006-07-20 |publisher=CNET |archive-url=https://archive.today/20120711115423/http://news.cnet.com/Last-waltz-for-Grokster/2100-1027_3-5937832.html |archive-date=2012-07-11 |url-status=dead }}</ref> Stating in 2008, visitors to the Grokster website (www.grokster.com) encountered this message: "YOUR IP address [...] HAS BEEN LOGGED. Don't think you can't get caught. You are not anonymous."<ref>{{cite web|url=http://www.grokster.com |title=Grokster website |access-date= 2008-10-24 |publisher=Grokster}}</ref>


[[Streamcast]], however, continued to fight the suit on remand. On September 27, 2006, the U.S. District Court for the Central District of California granted summary judgment in favor of the plaintiffs on Streamcast's liability for infringement,<ref>"[http://www.digitalmusicnews.com/legal/streamcast_summary.pdf September 27, 2006, Decision] {{Webarchive|url=https://web.archive.org/web/20061028012842/http://www.digitalmusicnews.com/legal/streamcast_summary.pdf |date=October 28, 2006 }}"</ref> though Streamcast promised to appeal the decision.<ref>{{cite web|url=http://www.internetnews.com/bus-news/article.php/3634866 |title=StreamCast Up Streaming Creek |access-date= 2006-09-28 |publisher=InternetNews.com}}</ref>
[[Streamcast]] continued to fight the suit on [[Remand (court procedure)|remand]]. On September 27, 2006, the U.S. District Court for the Central District of California ruled in favor of the entertainment companies and held Streamcast liable for the infringement of its users.<ref>"[http://www.digitalmusicnews.com/legal/streamcast_summary.pdf September 27, 2006, Decision] {{Webarchive|url=https://web.archive.org/web/20061028012842/http://www.digitalmusicnews.com/legal/streamcast_summary.pdf |date=October 28, 2006 }}"</ref><ref>{{cite web|url=http://www.internetnews.com/bus-news/article.php/3634866 |title=StreamCast Up Streaming Creek |access-date= 2006-09-28 |publisher=InternetNews.com}}</ref>


Fearing lawsuits similar to ''MGM v. Grokster'', [[Mark Gorton]], the [[chief executive officer]] of the firm that produces [[LimeWire]], has said that he plans to stop distributing his file sharing program.<ref name="NYT" /> He explained this by saying. A lawsuit was brought against LimeWire in ''[[Arista Records LLC v. Lime Group LLC]]'' (2010), which held that Lime Group LLC induced [[copyright infringement]] with its [[P2P file sharing]] software LimeWire and issued a [[permanent injunction]]. Following that ruling, the download page for the free LimeWire client has a footnote stating: "The download, however, is not a license to upload or download copyrighted material. We urge you to respect copyright and share responsibly."<ref>{{cite web|url=http://www.limewireofficial.com/ |title=Download LimeWire |access-date=2021-11-11}}</ref>
Fearing similar lawsuits, [[Mark Gorton]] of [[LimeWire]] vowed to stop distributing his file sharing program.<ref name="NYT" /> A lawsuit was brought against LimeWire, ''[[Arista Records LLC v. Lime Group LLC]]'' (2010), also led to a ruling in favor of the entertainment industry and an injunction against use of the software. Following that ruling, the download page for the free LimeWire client has a footnote stating: "The download, however, is not a license to upload or download copyrighted material. We urge you to respect copyright and share responsibly."<ref>{{cite web|url=http://www.limewireofficial.com/ |title=Download LimeWire |access-date=2021-11-11}}</ref>


== References ==
== References ==

Revision as of 20:10, 27 September 2022

MGM Studios, Inc. v. Grokster, Ltd.
Supreme Court of the United States
Argued March 29, 2005
Decided June 27, 2005
Full case nameMetro-Goldwyn-Mayer Studios, Inc., et al. v. Grokster, Ltd., et al.
Docket no.04-480
Citations545 U.S. 913 (more)
125 S. Ct. 2764; 162 L. Ed. 2d 781; 2005 U.S. LEXIS 5212; 75 U.S.P.Q.2d (BNA) 1001; 33 Media L. Rep. 1865; 18 Fla. L. Weekly Fed. S 547
Case history
PriorMotion to dismiss denied, 243 F. Supp. 2d 1073 (C.D. Cal. 2003); summary judgment granted in part to defendants, 259 F. Supp. 2d 1029 (C.D. Cal. 2003); plaintiffs' motion to dismiss counterclaims granted in part, 269 F. Supp. 2d 1213 (C.D. Cal. 2003); affirmed, 380 F.3d 1154 (9th Cir. 2004); cert. granted, 543 U.S. 1032 (2004).
SubsequentRemanded, 419 F.3d 1005 (9th Cir. 2005); summary judgment opinion on remand, 454 F. Supp. 2d 966 (C.D. Cal. 2006).
Holding
Producers of technology who promote the ease of infringing on copyrights can be sued for inducing copyright infringement committed by their users. Ninth Circuit Court of Appeals vacated and remanded.
Court membership
Chief Justice
William Rehnquist
Associate Justices
John P. Stevens · Sandra Day O'Connor
Antonin Scalia · Anthony Kennedy
David Souter · Clarence Thomas
Ruth Bader Ginsburg · Stephen Breyer
Case opinions
MajoritySouter, joined by unanimous
ConcurrenceGinsburg, joined by Rehnquist, Kennedy
ConcurrenceBreyer, joined by Stevens, O'Connor
Laws applied
Copyright Act of 1976

MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), is a United States Supreme Court decision in which the Court ruled unanimously that the defendants, peer-to-peer file sharing companies Grokster and Streamcast (maker of Morpheus), could be held liable for inducing copyright infringement by users of their file sharing software.[1] The plaintiffs were a consortium of 28 entertainment companies, led by Metro-Goldwyn-Mayer studios.

Background

Entertainment industry lawsuits against new technologies that enable the copying of copyrighted content date back to the 1980s, when the movie industry sought court injunctions against the sale and use of VCRs. In Sony Corp. v. Universal City Studios,[2] the U.S. Supreme Court ruled that a technology manufacturer cannot be held liable for its users' copyright infringement if widespread unauthorized copying is unlikely, and if the technology enables significant non-infringing uses as well.[3]

The advent of file sharing via the Internet in the late 1990s, and its enabling of easy and more widespread copying of copyrighted materials, inspired new arguments from the entertainment industry, because copying technology had progressed since the 1980s. The Sony precedent was partially modified in A&M Records v. Napster (2001), which addressed the ease of sharing music files online, and how the designers of the technology could be held liable for contributory copyright infringement and vicarious copyright infringement if such behavior was the primary use of the technology and the company benefited from it.[4]

Just a few years later, Internet technology had progressed to the point that trading large video files, including those for entire movies, had become viable via popular services including Grokster.[5] The MGM v. Grokster case is frequently characterized as a re-examination of the issues in Sony precedent, in light of rapidly progressing technologies and consumer behaviors. MGM and the other plaintiffs argued that makers of file sharing technology should held liable for their users' copyright infringement, via the contributory and vicarious infringement doctrines.[1]

The entertainment companies appealed to the Supreme Court after losing at two lower courts. The United States District Court for the Central District of California originally dismissed the case in 2003, citing the Sony precedent.[6] On appeal, the Ninth Circuit Court of Appeals upheld the district court's decision after acknowledging that peer-to-peer ("P2P") software has legitimate and legal uses.[7]

Computer and Internet technology companies such as Intel, and trade associations including firms such as Yahoo! and Microsoft, filed amicus curiae briefs in support of the file sharing companies, while the RIAA and MPAA both sided with MGM and the other entertainment companies. Napster, having lost its similar lawsuit about its enabling of users' copyright infringement, filed a brief in support of the entertainment companies.[8] Billionaire Mark Cuban partially financed Grokster's legal battle.[9]

Oral arguments

During oral argument, the Supreme Court justices appeared divided between the need to protect new technologies and the need to provide remedies against copyright infringement. Justice Antonin Scalia expressed concern that inventors would be chilled from entering the market by the threat of immediate lawsuits. Justice David Souter questioned how the interpretation of the law the plaintiffs argued for would affect devices like copy machines or the iPod.[1]

The music industry suggested that iPods have a substantial and legitimate commercial use in contrast to Grokster, to which Souter replied, "I know perfectly well that I can buy a CD and put it on my iPod. But I also know if I can get music without buying it, I'm going to do so."[10] On the other hand, the justices seemed troubled at the prospect of ruling that Grokster's alleged business model of actively inducing infringement and then reaping the commercial benefits was shielded from liability.[1]

Opinion of the Court

The opinion of the court was authored by Justice Souter, who wrote: "We hold 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."[1]

While the Court unanimously held that Grokster could be liable for inducing copyright infringement, concurring opinions by several of the Justices showed considerable disagreement over whether the case is substantially different from the Sony precedent, and whether that precedent should be modified. On the one hand, Justice Ginsburg, joined by Kennedy and Rehnquist, claimed that "[t]his case differs markedly from Sony" as there was insufficient evidence of non-infringing uses of the technology.[1] On the other hand, Justice Breyer, joined by Stevens and O'Connor, claimed "a strong demonstrated need for modifying Sony (or for interpreting Sony's standard more strictly) has not yet been shown," primarily because "the nature of ... lawfully swapped files is such that it is reasonable to infer quantities of current lawful use roughly approximate to those at issue in Sony." These justices concurred in the judgment on the narrow ground of Grokster's alleged inducement of its customers to use the product illegally.[1]

In the Grokster ruling, the Courtas a whole did not reach a decision to formally overturn the Sony precedent, and instead partially applied it to the specific issues raised by the Grokster and Streamcast technologies. Justice Souter noted: "in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the Sony safe harbor."[1] Thus, the Grokster ruling was limited to the specific technologies at issue in the case.

Subsequent developments

The Grokster decision has been hailed by legal researchers as striking a fair balance between the need to respect the copyrights of artists, and the benefits of allowing and promoting technological innovation. Conversely, others have criticized the decision for its apparent vagueness, contending that it permits financially powerful organizations like the RIAA and MPAA to effectively hinder development of new technology by actively engaging in litigation against the developers and distributors of new technologies.[11]

On November 7, 2005 Grokster announced that it would no longer offer its peer-to-peer file sharing service.[12] As part of a civil lawsuit enabled by this Supreme Court ruling, Grokster was forced to pay $50 million to various companies in the music and movie industries.[13] Stating in 2008, visitors to the Grokster website (www.grokster.com) encountered this message: "YOUR IP address [...] HAS BEEN LOGGED. Don't think you can't get caught. You are not anonymous."[14]

Streamcast continued to fight the suit on remand. On September 27, 2006, the U.S. District Court for the Central District of California ruled in favor of the entertainment companies and held Streamcast liable for the infringement of its users.[15][16]

Fearing similar lawsuits, Mark Gorton of LimeWire vowed to stop distributing his file sharing program.[11] A lawsuit was brought against LimeWire, Arista Records LLC v. Lime Group LLC (2010), also led to a ruling in favor of the entertainment industry and an injunction against use of the software. Following that ruling, the download page for the free LimeWire client has a footnote stating: "The download, however, is not a license to upload or download copyrighted material. We urge you to respect copyright and share responsibly."[17]

References

  1. ^ a b c d e f g h MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).  This article incorporates public domain material from judicial opinions or other documents created by the federal judiciary of the United States.
  2. ^ Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984).
  3. ^ Towers, Sandi (2008-05-05). Media and Entertainment Law. Cengage Learning. ISBN 978-1111798642.
  4. ^ A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir., 2001).
  5. ^ Gregorian, Jamie (2009). "Grokster, BitTorrent, Copyright infringement, and Inducement: How Modus Operandi Can Provide a Functional Standard for Future File-Sharing Cases". Texas Review of Entertainment & Sports Law. 10 (2): 145–168 – via HeinOnline.
  6. ^ MGM Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029 (C.D. Cal. 2003).
  7. ^ MGM Studios, Inc. v. Grokster, Ltd., 380 F.3d 1154 (9th Cir. 2004).
  8. ^ A list of briefs filed in the case is available at copyright.gov and eff.org Archived 2008-10-11 at the Wayback Machine.
  9. ^ Musil, Steven (2005-03-27). "Mark Cuban to finance Grokster defense". CNET. Archived from the original on 2012-07-15. Retrieved 2006-07-20.
  10. ^ Linda Greenhouse, "Lively Debate as Justices Address Filesharing", New York Times, March 30, 2005.
  11. ^ a b Zeller, Tom, Jr.; Roben Farzad; Saul Hansell (2005-06-28). "Sharing Culture Likely to Pause but Not Wither". The New York Times. Retrieved 2006-07-20.{{cite news}}: CS1 maint: multiple names: authors list (link)
  12. ^ "Grokster". Grokster. Retrieved 2006-07-20.
  13. ^ Borland, John (2005-11-07). "Last waltz for Grokster". CNET. Archived from the original on 2012-07-11. Retrieved 2006-07-20.
  14. ^ "Grokster website". Grokster. Retrieved 2008-10-24.
  15. ^ "September 27, 2006, Decision Archived October 28, 2006, at the Wayback Machine"
  16. ^ "StreamCast Up Streaming Creek". InternetNews.com. Retrieved 2006-09-28.
  17. ^ "Download LimeWire". Retrieved 2021-11-11.

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