MGM v. Grokster
MGM and several music and motion picture studios brought this suit against Grokster alleging vicarious and contributory copyright infringement for distributing peer-to-peer file-sharing software. According to MGM, over 90% of the material exchanged using Grokster’s file-sharing software is copyrighted material and therefore, copyright infringement occurs every time users exchange the information. MGM contends that Grokster contributes to this infringement by making the file-sharing software available to the public.
The district court disagreed with MGM, granting partial summary judgment in favor of Grokster as to liability arising from its present distribution activities. MGM appealed the decision to the Ninth Circuit Court of Appeals.
The Ninth Circuit held that Grokster was not liable for contributory infringement because it lacked sufficient knowledge of the infringement and it did not materially contribute to the copyright infringement. According to the court, the peer-to-peer file-sharing software distributed by Grokster was capable of substantial noninfringing uses. Based on this finding, the court held that Grokster could not be found liable for mere constructive knowledge, but must have had reasonable knowledge of specific infringement at the time it contributed to the infringement. Such knowledge was impossible in this case due to the structure of the network created by the Grokster software. Unlike previous file-sharing networks, Grokster did not maintain a searchable index on a centralized server. Instead, indexes were maintained on the computers of individual users, which prevented Grokster from learning of any infringement until after it had occurred. The network design also prevented Grokster from materially contributing to any copyright infringement because Grokster did not provide the site or facilities for infringement.
The Ninth Circuit also held that Grokster was not liable for vicarious copyright infringement. According to the court, Grokster lacked the right and ability to supervise the direct infringers. The peer-to-peer file-sharing software did not allow Grokster to block access to infringing users and did not provide Grokster with any opportunity to filter content. While MGM argued that Grokster could alter the file-sharing software to control user access, the court noted this was not a viable option because the software resided on the computers of the users and not on a centralized server.
Question Presented:
Whether the Ninth Circuit erred in concluding, contrary to long-established principles of secondary liability in copyright law (and in acknowledged
conflict with the Seventh Circuit), that the Internet-based "file sharing" services Grokster and StreamCast should be immunized from copyright liability for the millions of daily acts of copyright
infringement that occur on their services and that constitute at least 90% of the total use of the services.
