Grokster - The History of The Case in The U.S. Courts

The History of The Case in The U.S. Courts

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

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

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 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 in the Supreme Court. Oral arguments were held for MGM v. Grokster on 29 March 2005, and in June 2005, the court unanimously held that Grokster could indeed be sued for infringement for their activities prior to the date of this judgment. But the future impact of the case may only be to require software companies to more carefully advertise their packages to discourage illegal downloading. See also this section on inducement.

Grokster settled with plaintiffs shortly after the Supreme Court's decision. On 14 February 2006, the plaintiffs filed motions for summary judgment as to the liability of the remaining defendants, StreamCast and Sharman. Defendant Sharman Networks reached a tentative settlement agreement in August 2006.

On 27 September 2006, Judge Steven Wilson of the United States District Court for the Central District of California granted summary judgment to the plaintiffs as to StreamCast's liability. The court rejected StreamCast's argument that the plaintiff needs to show specific instances of infringement resulting from StreamCast's acts, holding that "Plaintiff need prove only that StreamCast distributed the product with the intent to encourage infringement."