A Brief Overview of the Grokster Decision

I'm not a legal expert by any means, but I have been following this case very closely, and I'm writing a research paper on it. At the end of the day, I think the ruling is essentially fair, although what it will mean for technology manufacturers is still somewhat unclear.

A brief overview of the Grokster decision

In my view, the Justices did what they had to do: they had to attempt to draw some kind of line in the sand between Grokster/Morpheus-type software companies, which are organized around profiting from massive copyright infringement, and the wide range of other companies whose products could conceivably make them contributorily liable for infringement under a broad ruling (such as iPods, cd burners, etc.).

The Court's problem? How to draw this line without throwing out the Betamax standard (from the 1984 Sony v. Universal, or Betamax, case). The Betamax standard can be restated as follows: a company is not liable for creating a technology that some customers may use for copyright infringing purposes, so long as the technology is capable of substantial non-infringing uses (paraphrased from EFF.org's Betamax page).

However, "substantial non-infringing uses" were not as . . . substantial a factor as in the Grokster decision as many observers thought they would be. The Supreme Court held that the Ninth Circuit Court of Appeals misread the Sony v. Universal (or Betamax) doctrine (and I'm quoting the Grokster decision's syllabus here) "to mean that when a product is capable of substantial lawful use, the producer cannot be held contributorily liable for third parties' infringing use of it, even when an actual purpose to cause infringing use is shown, unless the distributors had specific knowledge of infringement at a time when they contributed to the infringement and failed to act upon that information. Sony did not displace other secondary liability theories."

In other words, the Supreme Court held that the mere existence of substantial non-infringing uses of a technology does not act as a prophylactic against all contributory liability claims against the manufacturer. The Court emphasized the intent of Grokster and Streamcast (the company that runs the Morpheus P2P network) - to make money by inducing copyright infringement - and much of the opinion is dedicated to underscoring 1) the companies' advertising of their products as avenues for infringement, and 2) their business models, which rely on selling advertising space to profit off of massive infringement. Thus, while Grokster, LTD. has shown the kind of intent necessary to facilitate a contributory liability claim under the holding, someone like Bram Cohen, the computer genius who created the BitTorrent network (which is far-technologically-superior, and much more popular) and distributed it for free, probably has not.

Article Author: Thad Anderson

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