October 06, 2005

MGM v. Grokster: Liability for Third Party Infringement

Two file-sharing companies, Grokster, Ltd., and StreamCast Networks, Inc., suffered a devastating defeat when the Supreme Court issued its eagerly awaited decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.1 Nonetheless, the opinion, written by Justice Souter for a unanimous court, does not close the door on peer-to-peer (P2P) technology.

The question at issue was whether software distributors should be held liable for copyright infringements committed by third parties using their products. The law is clear that there is liability when someone is shown to be directly infringing the copyright of another. In this case, the defendants were not accused of any direct infringement; they were sued for distributing software that provided the means by which millions of others were able to access, download, and distribute copyrighted works, including movies and music in which the plaintiffs held the copyrights. ...

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