Supreme Court Decides Against Grokster In File Sharing Decision

The U.S. Supreme Court has ruled peer-to-peer sites such as Grokster, Kazaa and Morpheus can be held responsible for copyright infringement by their users. In a rare 9-0 decision in favor of Plaintiff MGM, the Justices held that a business distributing technology with the active intent of promoting copyright violations could not escape liability for subsequent copyright infringements. Although unanimous, the ruling is a strained effort to isolate file sharing from other industries.

In arguing their position, Grokster had relied on previous rulings regarding VHS technology. In a 1984 case, the Supreme Court ruled the makers of VHS recorders could not be held liable for copyright piracy by users of the machines. The Court specifically ruled that VHS and any other technology with "substantially non-infringing uses" could not be held responsible if individuals illegally taped movies or shows off of television. Indeed, lower courts had ruled in favor of Grokster using the VHS ruling as precedent. So, what's the difference between the two technologies?

In a somewhat tortured reasoning, the Justices distinguished the two cases by focusing on the "intent" of the companies. If a company distributes a technology with the intent that it be used by third parties for copyright infringement, then it is responsible. "Intent" is shown by a company making a "clear expression" of such intent or taking affirmative steps in said direction.

Writing the opinion, Justice Souter explained:

"There is no evidence that GroksterÂ…made an effort to filter copyrighted material from users' downloads or otherwise impede the sharing of copyrighted files,"

He further explained,

"The company showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users."

No Nail In The Coffin

The entertainment industry is trumpeting the end of file sharing. This ruling is no such thing. To understand the impact of the ruling, a brief discussion of legal procedure is necessary.

The Supreme Court decision does not find Grokster liable for anything. Instead, it simply reverses a lower court ruling that Grokster could not possibly be found liable. As a result, the case will return to the trial court and eventually go to trial. In the trial, the Plaintiff will have to prove that Grokster distributed file-sharing software with the intent that it be used for copyright infringement. Proving such a case will not be easy since “intent� is a vague concept.

In Closing

The decision of the Supreme Court provides the entertainment industry with a basis for pursuing file sharing companies. Is file sharing at an end? Not likely.

Richard Chapo, Esq., is a business lawyer with http://www.sandiegobusinesslawfirm.com - offering legal advice to San Diego businesses. This article is for general education purposes and does not address every facet of the subject matter. Nothing in this article creates an attorney-client relationship.