MGM Studios, Inc. v. Grokster, Ltd. (04-0480) is a United States Supreme Court case among a consortium of 28 of the largest entertainment companies (led by Metro-Goldwyn-Mayer studios) and P2P file sharing companies Grokster and Streamcast (maker of Morpheus). The case has been called the most important intellectual property case in decades. Oral arguments were held on March 29, 2005, and a decision is anticipated by the end of the court's session in June.

Significance

The case is frequently characterized as a re-examination of the issues in the Sony Corp. v. Universal City Studios case that protected VCR manufacturers from liability for contributory infringement. MGM wants makers of file sharing technology held liable for their users' copyright infringments. In Sony, the court held that technology could not be barred if it was "capable of substantial noninfringing uses." The Ninth Circuit Court of Appeals issued a partial ruling supporting Grokster in 2004. Software companies fear that a ruling against Grokster could stifle innovation.

Computer and Internet technology companies such as Intel, Yahoo! and Microsoft have filed amicus curiæ briefs in support of the file sharing companies, while the RIAA and MPAA have both sided with MGM. Billionaire Mark Cuban has said that he will finance Grokster's fight before the Supreme Court [1].

Oral Arguments

During oral argument, the Supreme Court justices appeared divided between the need to protect new technologies and the need to provide remedies against copyright infringement. Justice Antonin Scalia expressed concern that inventors would be chilled from entering the market by the threat of immediate lawsuits. Justice David Souter questioned how the interpretation of the law the plaintiffs argued for would affect devices like copy machines or the iPod. The music industry claimed that iPods have a substantial and legitimate commercial use in contrast to Grokster, to which Souter replied, "I know perfectly well if I can get music on my iPod without paying that's what I'm going to do," said Souter [2]. On the other hand, the justices seemed troubled at the prospect of ruling that Grokster's alleged business model of actively inducing infringement and then reaping the commercial benefits was shielded from liability. Grokster insisted that affirming the Ninth Circuit would only prevent an injunction against future use of the P2P software, while the plaintiffs would still be free to pursue damages in the district court for alleged past wrongful acts. Much of the Court, however, expressed skepticism that Grokster's continuing enterprise could be severable from the consequences of those prior acts.

External links

• Transcript of oral argument before the U.S. Supreme Court
• Transcript of oral argument before the Ninth Circuit

• Summary of the case
• Stanford case page
• California district court case summary
• Filed Briefs
• MGM v. Grokster: Day 1 - March 30, 2005 MP3 Newswire recap of first day of trial
• Timothy K. Armstrong's detailed summary of arguments