Grokster
Encyclopedia
Grokster Ltd. was a privately owned software company based in Nevis
, West Indies that created the Grokster peer-to-peer file-sharing client in 2001 that utilized the FastTrack protocol
. Grokster Ltd. was rendered extinct in late 2005 by the United States Supreme Court's decision in MGM Studios, Inc. v. Grokster, Ltd.
The court ruled against Grokster's peer-to-peer file sharing
program for computers running the Microsoft Windows
operating system
, effectively forcing the company to cease operations. The product was similar in look and feel to Kazaa
which is marketed by Sharman Networks
.
and the intellectual property
laws is a matter of debate. Grokster claimed they did not violate any copyright laws because no files passed through their computers. They assigned certain user computers as "root supernodes" that acted as music hubs for their company. Thus they were not responsible for controlling any specific file downloads.
The key issue in the copyright infringement
case was the so-called 'Sony safe-harbor' principle that was set by the Supreme Court over 21 years ago in Sony v. Universal Studios
464 U.S. 417 (1984). The ruling stated 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 argued that proof of reasonable, actual or potential, non-infringing use, is sufficient to fulfil the "substantiality" requirement. The RIAA and MPAA argued 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:
federal court 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
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."
The website is now threatening visitors that their actions can get them caught, displaying the visitor's IP address.
The screen text reads as follows:
Nevis
Nevis is an island in the Caribbean Sea, located near the northern end of the Lesser Antilles archipelago, about 350 km east-southeast of Puerto Rico and 80 km west of Antigua. The 93 km² island is part of the inner arc of the Leeward Islands chain of the West Indies...
, West Indies that created the Grokster peer-to-peer file-sharing client in 2001 that utilized the FastTrack protocol
FastTrack (protocol)
FastTrack is a peer-to-peer protocol that was used by the Kazaa, Grokster, iMesh, and Morpheus file sharing programs. FastTrack was the most popular file sharing network in 2003, and used mainly for the exchange of music mp3 files. The network had approximately 2.4 million concurrent users in 2003...
. Grokster Ltd. was rendered extinct in late 2005 by the United States Supreme Court's decision in MGM Studios, Inc. v. Grokster, Ltd.
MGM Studios, Inc. v. Grokster, Ltd.
MGM Studios, Inc. v. Grokster, Ltd. 545 U.S. 913 is a United States Supreme Court decision in which the Court unanimously held that defendant P2P file sharing companies Grokster and Streamcast could be sued for inducing copyright infringement for acts taken in the course of marketing file sharing...
The court ruled against Grokster's peer-to-peer file sharing
Peer-to-peer file sharing
P2P or Peer-to-peer file sharing allows users to download files such as music, movies, and games using a P2P software client that searches for other connected computers. The "peers" are computer systems connected to each other through internet. Thus, the only requirements for a computer to join...
program for computers running the Microsoft Windows
Microsoft Windows
Microsoft Windows is a series of operating systems produced by Microsoft.Microsoft introduced an operating environment named Windows on November 20, 1985 as an add-on to MS-DOS in response to the growing interest in graphical user interfaces . Microsoft Windows came to dominate the world's personal...
operating system
Operating system
An operating system is a set of programs that manage computer hardware resources and provide common services for application software. The operating system is the most important type of system software in a computer system...
, effectively forcing the company to cease operations. The product was similar in look and feel to Kazaa
Kazaa
Kazaa Media Desktop started as a peer-to-peer file sharing application using the FastTrack protocol licensed by Joltid Ltd. and operated as Kazaa by Sharman Networks...
which is marketed by Sharman Networks
Sharman Networks
Sharman Networks is a company headquartered in Australia and incorporated in Vanuatu. It owns the rights to the KaZaA file sharing software...
.
A summary of the "piracy" argument
It has been estimated that 90% of files shared on Grokster were downloaded illegally. Whether such downloads have substantially affected the retail sales of music, videos, and other works protected by copyrightCopyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
and the intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
laws is a matter of debate. Grokster claimed they did not violate any copyright laws because no files passed through their computers. They assigned certain user computers as "root supernodes" that acted as music hubs for their company. Thus they were not responsible for controlling any specific file downloads.
The key issue in the copyright infringement
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
case was the so-called 'Sony safe-harbor' principle that was set by the Supreme Court over 21 years ago in Sony v. Universal Studios
Sony Corp. of America v. Universal City Studios, Inc.
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 , also known as the "Betamax case", is a decision by the Supreme Court of the United States which ruled that the making of individual copies of complete television shows for purposes of time-shifting does not constitute copyright...
464 U.S. 417 (1984). The ruling stated 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 argued that proof of reasonable, actual or potential, non-infringing use, is sufficient to fulfil the "substantiality" requirement. The RIAA and MPAA argued 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
Amicus curiae
An amicus curiae is someone, not a party to a case, who volunteers to offer information to assist a court in deciding a matter before it...
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 peer-to-peer file sharingPeer-to-peer file sharingP2P or Peer-to-peer file sharing allows users to download files such as music, movies, and games using a P2P software client that searches for other connected computers. The "peers" are computer systems connected to each other through internet. Thus, the only requirements for a computer to join...
software and is therefore a non-infringing use. But many religious websites offer a free copy. Thus, since downloading the Bible through peer-to-peer 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 CommonsCreative CommonsCreative Commons is a non-profit organization headquartered in Mountain View, California, United States devoted to expanding the range of creative works available for others to build upon legally and to share. The organization has released several copyright-licenses known as 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 information to be transferred.
The history of the case in the U.S. courts
In April 2003, Los AngelesLos Angeles, California
Los Angeles , with a population at the 2010 United States Census of 3,792,621, is the most populous city in California, USA and the second most populous in the United States, after New York City. It has an area of , and is located in Southern California...
federal court judge, Stephen Wilson, ruled in favor of Grokster and Streamcast (providers of Morpheus
Morpheus (computer program)
Morpheus was a file sharing and searching peer-to-peer client for Microsoft Windows, developed and distributed by the company StreamCast, that originally used the Opennap protocol, but later supported many different peer-to-peer protocols...
P2P software) against the Recording Industry Association of America
Recording Industry Association of America
The Recording Industry Association of America is a trade organization that represents the recording industry distributors in the United States...
and the Motion Picture Association of America
Motion Picture Association of America
The Motion Picture Association of America, Inc. , originally the Motion Picture Producers and Distributors of America , was founded in 1922 and is designed to advance the business interests of its members...
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
United States Court of Appeals for the Ninth Circuit
The United States Court of Appeals for the Ninth Circuit is a U.S. federal court with appellate jurisdiction over the district courts in the following districts:* District of Alaska* District of Arizona...
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
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
agreed to hear the case. On 25 March 2005, billionaire and former Broadcast.com owner Mark Cuban
Mark Cuban
Mark Cuban is an American business magnate and investor. He is the owner of the National Basketball Association's Dallas Mavericks, Landmark Theatres, and Magnolia Pictures, and the chairman of the HDTV cable network HDNet....
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
Inducement rule
The inducement rule is a test a United States court can use to determine whether liability for copyright infringement committed by third parties could be assigned to the distributor of the device used to commit infringement.-Summary of the rule:...
.
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
Sharman Networks
Sharman Networks is a company headquartered in Australia and incorporated in Vanuatu. It owns the rights to the KaZaA file sharing software...
. 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."
Supreme Court decision leads to shutdown
Grokster closed its site on November 7, 2005. A note on its home page cited a United States Supreme Court ruling that copying copyrighted material using "unauthorized peer-to-peer services is illegal" and while legal download services exist, "this service is not one of them."The website is now threatening visitors that their actions can get them caught, displaying the visitor's IP address.
The screen text reads as follows:
External links
- MGM v. Grokster case documents
- The Legality of File Sharing - MGM vs Grokster
- MGM v. Grokster Ninth Circuit oral argument transcript
- MGM v. Grokster: Day 1 - March 30, 2005 MP3 NewswireMP3 NewswireFounded in 1998, the same year as MP3.com, MP3 Newswire is the oldest active news site devoted to digital media technology. Notable for its series of essays that chronicled the rise of digital music and the Internet’s acrimonious relationship with the record industry, MP3 Newswire initially was...
recap of first day of trial - Legally Speaking: Did MGM Really Win the Grokster Case? Pamela SamuelsonPamela SamuelsonPamela Samuelson is the Richard M. Sherman '74 Distinguished Professor of Law and Information Management at the University of California, Berkeley with a joint appointment in the UC Berkeley School of Information and Boalt Hall, the School of Law. She was appointed Visiting Professor of Law at...
- Technical Background of Grokster Decision - Philip Larson's Blog
- Legal Background of Grokster Decision - Philip Larson's Blog
- Summary of Supreme Court Decision - Philip Larson's Blog
- Advanced Peer-Based Technology Business Models. Ghosemajumder, ShumanShuman GhosemajumderShuman Ghosemajumder is a Canadian technologist, entrepreneur, and author. He is the former click fraud czar at Google, the author of works on digital distribution including the Open Music Model, and co-founder of TeachAIDS.-Early life:...
. MIT Sloan School of ManagementMIT Sloan School of ManagementThe MIT Sloan School of Management is the business school of the Massachusetts Institute of Technology, in Cambridge, Massachusetts....
, 2002. - Music Downloads: Pirates- or Customers?. Silverthorne, Sean. Harvard Business School Working KnowledgeHarvard Business SchoolHarvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
, 2004.