Situation:

Let’s be real. Who hasn’t used limewire to download free music?  Many people, at some point, have taken advantage of free music downloading from networks like limewire to save a little money.  It’s only a song, right?

P. Diddy singing his hit song that all those students are downloading illegally.

Well, imagine you run the recording studio for P. Diddy (or Puff Daddy or whatever his name is today).  You just recorded his newest album, and you can’t wait for the money to start flowing in.  But wait…all of a sudden you find out about an online network that is encouraging students (especially young people) to download music that is copywrited.  All that hard work, and you don’t even get paid for those illegal downloads?!  (Actually you’re pretty sure you made enough money from itunes sales alone, but it’s the principle of the matter!) You have to do something, but what should you do?  Do you sue all the students who downloaded your music illegally or just the network?  If you sue anyone, do you even have a chance of winning?  Let’s discuss some legal background..

Legal Background

A similar case to the hypothetical case above actually went to the Supreme Court in 2005 as music sharing became more popular.  In Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., several larger music studios discovered that the defendents in the trial, Grokster and StreamCast Networks had distributed software that allowed computer users to share files through peer-to-peer networks. (Basically, these networks are less expensive and more stable, so they are becoming more popular.) The two companies get their revenue by the advertising they stream to users while they are downloading the files (that’s why the case is in the advertising chapter) and the companies do not block any users from using their software to download illegal files, let alone warn people beforehand that they are downloading illegal files.

MGM Studios appeal for reconsideration of the lower court's ruling was eventually granted.

So here’s what happened:  The court decided the outcome of the case with the “Sony law,” which checked if a company is “capable of commercially significant noninfringing uses.”  (They said Sony was because they produced a video recorder so people could watch their recorded videos later at their convenience) Although some of the concurring opinions were different, the court said that the lower courts were at fault for ruling in favor of Grokster.  Instead, the court ruled in favor of MGM because Grokster’s intent was to provide, even encourage copywrite infringement by way of advertising.  Grokster showed a purpose or cause to benefit from third party acts of copywrite infringement.

So how do you feel about the following questions?
What would you do if you were a recording studio and found out that people were illegally downloading your music?
Do you think peer-to-peer music sharing networks are ethical?
How about advertising?  Do you think the result of the case would have turned out differently if Grokster didn’t advertise for people to freely download copywrited music? Would the court have been more lenient?