In summer 2005, the United States
Supreme Court issued a decision which is surely destined to play a
significant role in the interrelation between law and technology in the
coming years. The case, Metro-Goldwyn-Mayer Studios Inc., et al. v.
Grokster, Ltd., et al., pitted copyright holders against the operators
of certain peer-to-peer online file-sharing services and was awaited by
many in both the legal and technology communities as a referendum on
the landmark legal precedent set in the Sony-Betamax case. The Sony
case came to represent the legal standard for determining when
manufacturers of dual-use technology - technology capable of both
legally noninfringing and infringing uses - should be given a safe
harbor from liability for acts on the part of their consumers which
violated copyright law.
Surprisingly, the Supreme Court's decision did not center around an affirmation or rejection of the Sony ruling; rather the Court based their opinion on a common law principle which, they held, was not preempted by the holding in Sony. The inducement to infringe copyright, although not a completely novel cause of action, has been perceived by some commentators to introduce a change in the legal landscape of secondary liability for copyright infringement. In this article, we provide an extensive exposition of the Court's decision and discuss the disposition of the decision including the implication of the two concurring opinions. We also speculate on the impact that the Court's decision will have on the technology sector and on technological innovation in particular. Ultimately, we grapple with new questions which the decision has presented for industry and the continued existence of peer-to-peer file-sharing.
Last updated February 18, 2008