MGM v. Grokster

As almost everyone knows by now, the Supreme Court handed down a decision in the case of Metro-Goldwyn-Mayer Studios Inc. et al. v. Grokster, Ltd., et al. which some hoped would clarify the "Betamax" decision for newer technologies. Once I get the chance to read the full decision (including both concurring opinions), I will write a more detailed opinion probably in the next few days. In the meantime I thought I would address the chorus of handwringers in the tech world decrying the decision as the death knell of innovation. Put simply, the decision merely sent the case back to lower courts to be heard in full. The Court unanimously held that the lower courts were in error when they dismissed the case based on the 1984 "Betamax" decision which created what has been dubbed the Sony rule. The Sony rule states that just because a technology can be used to infringe on copyrights does not mean the providers of that technology should be held liable for those infringements. The Court instead found that this case was markedly different from "Betamax" since there was "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." Since there is this evidence, the case needs to be heard in full by the lower court.

Some in the tech community believe this decision will give anyone the right to sue manufacturers or distributors of a technology simply because they object to the technology thus stifling innovation for fear of lawsuits. This is not so. In my opinion it merely draws attention to the fact that a company cannot make money off of a product that they expressly tout as being able to commit a crime, namely copyright infringement. It might be analogous to a photocopier manufacturer saying: "Our copiers are so great that you can make copies of all your favorite books to hand out for free to strangers!" While the copier technology on its own would be acceptable according to the Sony rule, the marketing of the product would open the manufacturer up to liability lawsuits. Now, I'm not saying that this is what Grokster and StreamCast did, and in fact neither is the Court (at least not explicitly according to what I have read so far). They are simply saying that MGM should be given the opportunity to present evidence of this at a full trial. To be continued...

In case you are interested, here is the full opinion on FindLaw.