The Supreme Court’s Ruling on MGM v. Grokster: What It Is and What it Means for You


Looks like we might have to go back to stealing music the original
: Today the Supreme Court has decided unanimously the following:

We hold that one who distributes a device with the object of promoting
its use to infringe copyright, as shown by clear expression or other
affirmative steps taken to foster infringement, is liable for the resulting
acts of infringement by third parties.

The defendants, Grokster and the Morpheus (and Morpheus)-hawking StreamCast,
seem to have “clearly voiced the objective that recipients use it to
download copyrighted works,” and “each took active steps to encourage
infringement.” A lower court will now officially proceed with hearing the
cases and meting out retributions.

The courts cite plenty of “smoking gun” documentation that supports both
companies’ intent of infringement, not unlike the paper trail that Napster
left when it went down in 2001
. Unlike Napster, however, Grokster and
StreamCast don’t have central servers containing song and movie titles, so
the onus of infringement heretofore has been on the clients themselves (cf.
all the RIAA-applauded lawsuits and raids).

So good news/bad news: While the Court did not make a strict ruling against
the technology– concurrent with the Sony
v. Universal ruling on the Betamax in 1984
(remember me?), which said a
technology developer isn’t responsible for illicit uses of its product–
this bit about “clear expression…to foster infringement” is pretty damn
vague for one: How can a court judge a developer’s intent? Cyber-law prof
Ernest Miller is concerned that loophole could hamper technological

More dangerously, the intent clause could potentially de-classify a
developer’s engineering meetings, marketing plans, e-mails, and any sort of
internal correspondence that might shed light on intent.

At the same time, as Doug Lichtman notes, “Intent-based standards, after all, are among the easiest to avoid“:

MGM won on paper today, but my first reading of the opinion makes me
wonder whether the victory will have any bite outside of this specific
litigation. . . Just keep your message clear — tell everyone that your
technology is designed to facilitate only authorized exchange — and you
have no risk of accountability.

What does this mean for your favorite peer-to-peer file-sharing network? Public Knowledge, another
cyber-law blog, sums it up as the following:

In the absence of such clear expression or other affirmative acts
fostering infringement, a company that provides peer-to-peer technology is
not going to be secondarily liable under the Copyright Act.

Moreover, Tim Wu at Picker MobBlog suggests simple ‘good-legal’ business models that would “insulate a business from
the new ‘intent’ liability

1. Making a deal with the recording industry (iTunes)

2. Encryption of content offered (also iTunes)

3. A network optimized to some other explicit purposes (Freenet, privacy
and anonymity, or even email — personal communications)

4. Phone home technologies — software that is montored centrally.

And what does this mean for you? Surprisingly not much. CNN/Mon
ey explains
, if your file-sharing service is located outside the U.S.
(and therefore outside of U.S. copyright jurisdiction), or is located
nowhere and physically/legally can’t be shut down, such as the popular
BitTorrent client.

Ernest Miller offers more minutiae in Q&A format at Corante.