Mgm Grokster

Metro-Goldwyn-Mayer Studios Inc. et al. v. Grokster, Ltd., et al.

Procedural History

• Metro-Goldwyn-Mayer Studios, Inc. (hereinafter MGM) sues Grokster, Ltd. for inducing copyright infringement among its users.

• United States District Court for the Central District of California granted respondents summary judgment as to liability arising from distribution of their software.

• The Ninth Circuit Court of Appeals affirmed, acknowledging that the software has legal, legitimate and noninfringing uses.

• MGM is granted certiorari.

Issues

1. Is Grokster liable for copyright infringement when there is no evidence of an effort to filter the copyright material?

2. Did Grokster monitor its users to help avoid copyright infringement?

3. Did Grokster induce by advertisement or solicitation that broadcasted a message designed to stimulate others to commit violations of the law?

4. Was there intent of Grokster to infringe on copyright laws?

Facts

• A peer-to-peer file sharing software was released by Grokster.

• Grokster is aware that users employ their software primarily to download copyrighted files, although the decentralized networks do not reveal which files are copied, and when.

• The record showed that when Grokster began to distribute their free software, they clearly voiced the objective that recipients use the software to download copyrighted works and took active steps to encourage infringement.

• Grokster makes money from advertisement space. The more users Grokster has, the more the ad space is worth, therefore the more users of the program, the more revenue Grokster receives.

Rule of Law

• 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, going beyond mere distribution with knowledge of third-party action, is liable for the resulting acts of infringement by third parties...