MGM vs Grokster: The potential fallout

Grockster, Streamcast lose case versus MGM. Question is, how far does this go?

Lines that stand out in my mind are boxed in; my thoughts are below the boxes.

When a widely shared product is used to commit infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, so that the only practical alternative is to go against the device's distributor for secondary liability on a theory of contributory or vicarious infringement. One infringes contributorily by intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting from direct infringement while declining to exercise the right to stop or limit it. Although "[t]he Copyright Act does not expressly render anyone liable for [another's] infringement," Sony, 464 U. S., at 434, these secondary liability doctrines emerged from common law principles and are well established in the law, e.g., id., at 486. Pp. 10-13.

In short, companies who push actions they know are illegal are responsible when everyone does the illegal actions. Nothing odd about that.

Note that Sony didn't go around saying "You can make billions of copies of these things and spread them around the world" when their case was in the Supreme court. They made their case out to be a simple "personal use" case, and won the ability to market Betamaxes that could record. VHS came in under this line, movie rental stores sprung up all over, and now Hollywood has no choice but to profit off any movie it makes.

Nothing in Sony requires courts to ignore evidence of intent to promote infringement if such evidence exists. It was never meant to foreclose rules of fault-based liability derived from the common law. 464 U. S., at 439. Where evidence goes beyond a product's characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement, Sony's staple-article rule will not preclude liability. At common law a copyright or patent defendant who "not only expected but invoked [infringing use] by advertisement" was liable for infringement. Kalem Co. v. Harper Brothers, 222 U. S. 55, 62-63.

This goes further, stating that you don't NEED a written law in order to hold companies pushing AND profiting off illegal activities responsible for the actions of those using their product.

In addition to intent to bring about infringement and distribution of a device suitable for infringing use, the inducement theory requires evidence of actual infringement by recipients of the device, the software in this case. There is evidence of such infringement on a gigantic scale.

In short, the fact that you're successful in causing people to do illegal activities makes you guilty.

So, in the end Sony still stands -- in theory. Home, individual use is still accepted, as it's merely an extension of what one has paid for. It's profiting off the making of copies -- whether by selling or by profiting indirectly from the copying.

Whether the music and movie industries will stop at this is doubtful, of course. More often than not, what's allowed is not so much a question of what's legal or illegal but what's accepted or forcefully denied. Don't be surprised if we see a bunch of lawsuits made not so much to enforce the law but to effect a change in the atmosphere -- make p2p too risky to try out, thus cutting down on file sharing through that route.

Next Post: My Thoughts on mp3 trading, cassettes and the present state of the music industry