November 21, 2011
- Facts of the Case
Grokster, LTD. (and other associated companies) had distributed a free software program that served as a peer-to-peer network client – a program that allows users to connect their computers to one another directly and anonymously in order to transfer data. According to observed data, users of this software primarily utilized it to engage in the sharing of copyrighted materials, such as music or movies. According to court record, respondent companies encouraged and promoted the use of their software for this purpose and even profited from client use through the employ of streamed advertising services. Several movie studios (hence referred et al as “MGM”) alleged that Grokster and their associates intentionally distributed their software to serve such purpose, thereby infringing upon their copyrights as held by the Copyright Act. The district courts had ruled in favor of Grokster – their reasoning being that software distributors were not liable for any violations of copyright through the use of their software, as it was the software users responsible for infringement and completely possible to utilize said software for lawful purposes.
2. Legal Issue:
Are companies that openly distribute file-sharing software, encouraging and profiting from the copyright infringement resultant from the use of said software, liable for the offending infringement?
In a unanimous decision, the Supreme Court held that companies that distributed such software and promoted its use for the infringement of copyright, were indeed to be held liable for any resulting acts of infringement.
The court’s decision was largely based on the fact that the software companies involved had advertised their product amongst their users for the purpose of sharing copyrighted materials. According to evidence present during the trial, the software was advertised as an alternative to the previously controversial “Napster” sharing client. This, according to the court, signified explicit intent to engage users in copyright infringing sharing. Also, the court noted that the nature of the developer’s source of revenue – internet ad streaming – was profiting off of increased traffic of potential infringing activities. Because the developer made more money through advertisements as more users connected, promotion of the software as a means to distribute and download copyrighted material was seen as a means to profit off of direct infringement of MGM et al. The Court also referred to a previous case in which Sony had been allegedly responsible for copyright infringement because it produced VCRs – which could be used to record copyrighted television programming. While the idea of “secondary liability” was discussed during that case, the Court held that the VCR was “capable of commercially significant non-infringing uses.” The Court insisted that, due to the nature of the advertisements and revenue source surrounding the file sharing client, that this case was not the same as the precedent.
5. Questions to Consider:
- What is the significance of this case?
- What do you make of the change in legal precedent?
- Do you believe that companies that develop the software should be responsible for how users actually use the software? (In this case? How about in general?)
- Do you think that this case would be ruled differently today?
2 Responses to “Metro-Goldwyn Mayer Studios, Inc. V. Grokster, LTD. (2005)”
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