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Case archives

Here you will find summaries of selected significant copyright cases.

•The Grokster Decision: MGM Studios, Inc. v. Grokster, Ltd. 545 U.S. 913 (2005)
The Basics & Key Points

It is unlikely that a discussion about online music services on campus can take place without consideration of the “Grokster” litigation.  What follows aims to keep such discussions well informed about the facts of this case and about what the US Supreme Court decision in this case does—and does not—say about peer-to-peer technologies and university responsibilities.

General Background of the Case

After the initial Napster software company went out of business as a result of a 2001 court decision , other file-sharing software programs—such as Grokster and Streamcast—became popular. Grokster and Streamcast distribute free software that allows computer users to share electronic files through peer-to-peer (P2P) networks where computers communicate directly, not through a central server. The P2P software allows any kind of file to be shared, although most files shared in this way are copyrighted music and video. 

Metro-Goldwyn-Mayer (and others) sued Grokster and Streamcast for contributory copyright infringement.   The question asked in the litigation was “When will a technology vendor be held liable for the copyright infringements committed by 3rd parties with its products?”

Lower Court Rulings

The District Court ruled in favor of Grokster and the 9th Circuit Court of Appeals affirmed.  Their decision was based on a reading of the Sony case that found distributors of products capable of substantial noninfringing uses are not liable for contributory infringement if they had no actual knowledge of the infringement or failed to act when they did.  The 9th Circuit further held that Grokster did not materially contribute to infringement because the users did their own searching, downloading, etc.  Additionally, there was no vicarious liability because Grokster did not monitor or control the software’s use, there was no ability to supervise, and there was no independent duty to police the infringement.

Supreme Court Ruling

The US Supreme Court agreed to hear the Grokster case and issued its ruling on June 27, 2005.   The Supreme Court held 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, going beyond mere distribution with knowledge of 3rd party action, is liable for the resulting acts of infringement by 3rd parties using the device, regardless of the device’s lawful uses.”

Key Points About the Grokster Decision

1. The Grokster case is about uses of Grokster and Streamcast’s technology, it is not about uses of P2P technology generally.  (Ginsberg opinion, concurring).  File sharing itself is not illegal.  The Court recognized the benefits of P2P in security, cost, and efficiency—and that it is employed to store and distribute electronic files by universities, government agencies, corporations, and libraries, among others.

1. The Supreme Court held 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 Streamcast were not just passive recipients of information regarding copyright infringement; instead, they had the clearly voiced objective that consumers use the software to download copyrighted works and they took active steps to encourage infringement.

1. As such, companies that make technology are not responsible for its use unless there is evidence of active steps taken to encourage direct infringement.  The technological design is not a factor in determining infringement.

1. In other words, simply knowing a technology can be put to infringing uses is not enough; there must be active steps to encourage infringement, such as advertising and instructing how to infringe.  Mere knowledge of infringing potential or of actual infringing uses would not be enough to subject a distributor (or a university) to liability, nor would ordinary acts incident to product distribution, such as offering technical support or product updates.

1. Filtering/policing is not required:  In the absence of other evidence of intent (to induce), 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 was otherwise capable of substantial noninfringing uses.

1. This is a pro-consumer decision that strikes a careful balance between encouraging innovation and protecting copyright.  “A rule that premises liability on purposeful, culpable expression and conduct does nothing to compromise legitimate commerce or discourage innovation having a lawful purpose.” (Grokster majority opinion)
   
2. What do universities have to do as a result of this decision? As Georgia Harper, Intellectual Property Counsel for the University of Texas, says, “Probably nothing more than they are already doing.  This decision does not require monitoring, filtering, censoring, or outlawing P2P file sharing.  Since universities do not ordinarily engage in active inducement of copyright infringement, they would not incur contributory liability for the acts of their students misusing file-sharing software.  Furthermore, universities already engage in substantial copyright education activities, have copyright policies in place, and respond appropriately to DMCA complaints.

A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (CA9 2001).

Sony Corp. of America v. Universal City Studios, Inc., 464 US 417, 78.

L.Ed2d 574 (1984)

Metro-Goldwyn-Mayer Studios Inc., et al., v. Grokster, Ltd., et al., 125 S.Ct 2764 (2005).