Grokster

Grokster Ltd. is a software company specialising in person to person packages. The company is privately owned and has its registered office in Nevis, West Indies. One of the products that it has released is a peer-to-peer file sharing program which runs on computers loaded with the Microsoft Windows operating system. The product is similar in look and feel to KaZaA which is marketed by Sharman Networks.

Contents

1 The technology 2 The history of the case in the U.S. courts 3 A summary of the argument 4 See also 5 External links

The technology

There are two major networks. KaZaA and Grokster are based on the FastTrack P2P file-sharing system, and share a common network.The Gnutella network is accessed through Bearshare, Gnucleus, LimeWire, Morpheus, Phex, Shareaza, and others. It has been estimated that 90% of files shared on Grokster are downloaded illegally. [1] (http://www.npr.org/dmg/dmg.php?prgCode=ME&showDate=29-Mar-2005&segNum=1&mediaPref=WM&getUnderwriting=1) But, empirical evidence suggests that such downloads have not substantially affected the retail sales of music, videos, etc. http://mason.gmu.edu/~atabarro/FileSharing.pdf.

The history of the case in the U.S. courts

In April 2003, Los Angeles federal court judge, Stephen Wilson, ruled in favour of Grokster and Streamcast (providers of Morpheus P2P software) against the Recording Industry Association of America and the Motion Picture Industry and held that their file sharing software was not illegal.

On 20 August 2003, the decision was appealed by the RIAA and the MPPA.

On 17 August 2004, the United States Court of Appeals for the Ninth Circuit issued a partial ruling supporting Grokster, holding

This appeal presents the question of whether distributors of peer-to-peer file-sharing computer networking software may be held contributorily or vicariously liable for copyright infringements by users. Under the circumstances presented by this case, we conclude that the defendants are not liable for contributory and vicarious copyright infringement and affirm the district court's partial grant of summary judgment.

In December 2004, the Supreme Court agreed to hear the case. On 25 March 2005, billionaire and former Broadcast.com owner Mark Cuban announced he would finance Grokster's fight (http://www.mp3newswire.net/stories/5002/cuban.html) in the Supreme Court. Oral arguments were held for MGM v. Grokster on 29 March, 2005. A decision is expected in July 2005.

A summary of the argument

The key issue in this copyright infringement case is the so-called Sony safe-harbor principle which was set by the Supreme Court twenty-one years ago in Sony v. Universal Studios 464 U.S. 417 (1984). This states that, "…the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial non-infringing uses." (Sony 464 U.S. at 442). Grokster argues that proof of reasonable, actual or potential, non-infringing use, is sufficient to fulfil the ""substantiality"" requirement. The RIAA and MPAA argue that Sony safe-harbor requires proof that the non-infringing use is the primary one; an incidental non-infringing use is not enough.

Among the amicus curiae briefs:

• The U.S. government proposed that a manufacturer of technological device will be protected by Sony safe-harbor only if the non-infringing uses are commercially significant compared to the infringing uses.
• A group of law and economic professors (among them Professors Kenneth J. Arrow, and William M. Landes) argue that the test whether the non-infringing use is substantial, requires an examination of all the existing legal mechanisms for accomplishing the same task. The example given is the distribution of the Bible. This is lawfully available through P2P file sharing software and is therefore a non-infringing use. But many religious websites offer a free copy. Thus, since downloading the Bible through P2P file sharing software is an addition to the list of well-established legitimate methods for obtaining a free Bible, the benefits of this addition are not substantial and the overall use of P2P software should not be considered a non-infringing use.
• The cost-benefit analysis, first introduced by Judge Posner from the 7th Circuit Court of Appeals in the Aimster case, holds that a manufacturer of technological device will enjoy the Sony safe-harbor only if "...it would have been disproportionately costly for him to eliminate or at least reduce substantially the infringing uses."
• The Creative Commons organization presented a strong argument for non-infringing use in the form of the Creative Commons licence, despite the fact that the architecture of the software did not allow for the licence to be transferred.

See also

MGM Studios, Inc. v. Grokster, Ltd.

External links

• Grokster's homepage (http://www.grokster.com/)
• MGM v. Grokster case documents (http://www.eff.org/IP/P2P/MGM_v_Grokster/)
• MGM v. Grokster Ninth Circuit oral argument transcript (http://www.groklaw.net/article.php?story=20040823002045984)
• MGM v. Grokster: Day 1 (http://www.mp3newswire.net/stories/5002/mgmday1.html) - March 30, 2005 MP3 Newswire recap of first day of trialhu:Grokster