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ARTICLE
MGM v. GROKSTER, Ltd
Par Yannick-Eléonore Scaramozzino
Supreme Court of the United States No 04-480 Metro-Goldwyn-Mayer Studios Inc., Et AL., Petitioners v.Grokster, Ltd, et Al



EXTRACT



Grokster, Ltd, and StreamCast Networks, Inc., distribute free software products that allow computer users to share electronic files through peer-to-peer networks. A group of copyright holders (MGM for short, but including motion picture studios, recording companies, songwriters, and music publishers) sued Grokster and StreamCast for their users’ copyright infringements allerging that they knowingly and intentionally distributed their software to enable users to reproduce and distribute the copyrighted works in violation of the Copyright Act, 17 U.S.C §101 et sea (2000 ed. And Supp II). MGM sue damages and an injunction.

[…]

In Sony Corp. v Universal City Studios, the Court addressed a claim that secondary liability for infringement can arise from the very distribution of a commercial product. There, the product, novel at the time, was what we know today as the videocassette recorder or VCR. Copyright holders sued Sony as the manufacturer, claiming it was contributory liable for infringement that occurred when VCR owners taped copyrighted programs because it supplied the means used to infringe, and it has constructive knowledge that infringement would occur. At the trial on the merits, the evidence showed that the principal use of the VCR was for “time-shifting”, or taping a program for later viewing at a more convenient time, which the Court found to be a fair, not an infringing, use. There was no evidence that Sony had expressed an object of bringing about taping in violation of copyright or had taken active steps to increase its profits from unlawful taping.



The Court agrees with MGM that the Court of Appeals misapplied Sony, which it read as limiting secondary liability quite beyond the circumstances to which the case applied. For the Court, Grokster and StreamCast, unlike the manufacturer and distributor in Sony, acted with a purpose to cause copyright violations by use of software suitable for illegal use. Three features of this evidence of intent are particularly notable.

First, each company showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users. StreamCast’s internal documents made constant reference to Napster, it initially distributed its Morpheus software through an OpenNap program compatible with Napster, it advertised its OpenNap program to Napster users, and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files, including copyrighted movies and software programs. Grokster’s name is apparently derived from Napster, it too initially offered an OpenNap program, its software’s function is likewise comparable to Napster’s, and it attempted to divert queries for Napster onto its own Web site. Grokster and StreamCast’s efforts to supply services to former Napster users, deprived of a mechanism to copy and distribute what were overwhelmingly infringing files, indicate a principal, if not exclusive, intent on the part of each to bring about infringement.

Second, this evidence of unlawful objective is given added significance by MGM’s showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software. [….]

Third, there is a further complement to the direct evidence of unlawful objective. StreamCast and Grokster made money by selling advertising space, by directing ads to the screens of computers employing their software. The more the software is used, the more ads are sent out and the greater the advertising revenue becomes. Since the extent of the software’s use determines the gain to the distributors, the commercial sense of their enterprise turns on high-volume use, which the record shows is infringing.

According to the Court, the unlawful objective is unmistakable.



In sum, this case is significantly different from Sony and reliance on that case to rule in favour of StreamCast and Grokster was error. Sony dealt with a claim of liability based solely on distributing a product with alternative lawful and unlawful uses, with knowledge that some users would follow the unlawful course. The case struck a balance between the interests of protection and innovation by holding that the product’s capability of substantial lawful employment should bar the imputation of fault and consequent secondary liability for distributing a product open to alternative uses.



Here, evidence of the distributors’ words and deeds going beyond distribution as such shows a purpose to cause and profit from third-party acts of copyright infringement. If liability for inducing infringement is ultimately found, it will not be on the basis of presuming or imputing fault, but from inferring a patently illegal objective from statements and actions showing what that objective was.

There is substantial evidence in MGM’s favour on all elements of inducement, and summary judgment in favour of Grokster and StreamCast was error. On remand, reconsideration of MGM’s motion for summary judgment will be in order.

The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.



It is so ordered.

Source : Supreme Court of the United States, No 04-480, Metro-Goldwyn-Mayer Studios Inc., Et AL., Petitioners v.Grokster, Ltd, et Al, On writ of certiorari to the United States Court of Appeals for the Ninth Circuit. June 27, 2005
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Article mis en ligne le 29juin 2005

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