Featured Chrome Extensions:

Casey IRACs are produced by an AI that analyzes the opinion’s content to construct its analysis. While we strive for accuracy, the output may not be flawless. For a complete and precise understanding, please refer to the linked opinions above.

Keywords

lawsuitliabilityappealmotionsummary judgmentcopyrightvicarious liability
copyright

Related Cases

Levi Strauss & Co. v. GTFM, Inc., 196 F.Supp.2d 971, 62 U.S.P.Q.2d 1394
View Case »
Newton v. Thomason, 22 F.3d 1455, 28 Fed.R.Serv.3d 1039, 30 U.S.P.Q.2d 1633, 22 Media L. Rep. 1609
View Case »
Sorensen v. WD-40 Co., 792 F.3d 712, 115 U.S.P.Q.2d 1128
View Case »
Peaceable Planet, Inc. v. Ty, Inc., 362 F.3d 986, 70 U.S.P.Q.2d 1386
View Case »
PRL USA Holdings, Inc. v. U.S. Polo Ass’n, Inc., 520 F.3d 109, 86 U.S.P.Q.2d 1022, 75 Fed. R. Evid. Serv. 1104
View Case »
Justia Law Link
LexisNexis Link
Westlaw Link
CourtListener Link
Oyez Link

Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S.Ct. 2764, 162 L.Ed.2d 781, 73 USLW 4675, 2005 Copr.L.Dec. P 29,007, 75 U.S.P.Q.2d 1001, 33 Media L. Rep. 1865, 05 Cal. Daily Op. Serv. 5620, 05 Daily Journal D.A.R. 7666, 18 Fla. L. Weekly Fed. S 547

Facts

Copyright holders, including songwriters and motion picture studios, initiated a copyright infringement lawsuit against distributors of peer-to-peer file sharing software, Grokster and StreamCast. The District Court granted partial summary judgment in favor of the distributors regarding contributory and vicarious infringement, leading to an appeal. The Ninth Circuit affirmed the lower court's decision, stating that the distributors were not liable due to the software's capability for substantial noninfringing uses and lack of actual knowledge of specific infringements. The Supreme Court granted certiorari to address the liability of distributors for third-party copyright infringement.

The record is replete with evidence that from the moment Grokster and StreamCast began to distribute their free software, each one clearly voiced the objective that recipients use it to download copyrighted works, and each took active steps to encourage infringement.

Issue

Under what circumstances is a distributor of a product capable of both lawful and unlawful use liable for acts of copyright infringement by third parties using the product?

The question is under what circumstances the distributor of a product capable of both lawful and unlawful use is liable for acts of copyright infringement by third parties using the product.

Rule

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. Secondary liability for copyright infringement may arise from intentional inducement or encouragement of direct infringement, and vicarious liability arises when one profits from direct infringement while failing to exercise the right to stop or limit it.

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.

Analysis

The court analyzed the distributors' actions and intent, noting that they actively promoted their software as a means to download copyrighted works. Evidence showed that both companies aimed to attract users from the now-defunct Napster, and they took steps to market their software as alternatives. The court emphasized that the distributors' knowledge of users' infringement and their failure to implement measures to prevent it indicated an intent to foster infringement, which could lead to liability despite the software's potential for lawful use.

The classic instance of inducement is by advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations. MGM argues persuasively that such a message is shown here.

Conclusion

The Supreme Court held that the distributors were liable for copyright infringement due to their clear intent to promote infringement through their software, which was primarily used for unlawful file sharing.

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.

Who won?

The prevailing party in this case is MGM Studios, Inc. The Supreme Court's ruling vacated the Ninth Circuit's decision and remanded the case for further proceedings, indicating that MGM's claims of copyright infringement against Grokster and StreamCast had merit based on the evidence of the distributors' intent to promote infringement.

The Supreme Court's ruling vacated the Ninth Circuit's decision and remanded the case for further proceedings, indicating that MGM's claims of copyright infringement against Grokster and StreamCast had merit based on the evidence of the distributors' intent to promote infringement.

You must be