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April 1, 2005

Grokster Supreme Court Arguments

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On March 29th, the Supreme Court held oral arguments in a suit by Metro-Goldwyn-Mayer Studios, Inc. and other entertainment producers against Grokster Ltd. and similar developers of computer programs that allow users to copy files from each others computers (e.g. peer-to-peer software).

The Sole Question presented for the Supreme Court was:

Whether the court of appeals correctly ruled, on the only issue before it, that respondents

In April 2003, the U.S. District Court for the Central District of California held that under Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417 (1984) which established the so-called Betamax rule, that the developers of Grokster were not secondarily liable for the copyright infringement of their users. (Metro-Goldwyn-Mayer Studies, Inc. v. Grokster, Inc., 259 F. Supp.2d 1029, 66 USPQ2d 1579 (C.D. Cal 2003).

Under the Betamax rule, a developer is not secondarily liable for infringement if the technology in question is "capable of substantial noninfringing uses." The U.S. District Court of Appeals for the Ninth Circuit affirmed the district court's granting of summary judgment in favor of Grokster, ruling that Grokster did not have the type of knowledge of impending infringement necessary to demonstrate contributory or vicarious infringement. 380 F.3d 1154 (9th Cir. 2004). The Supreme Court granted certiorari last December.

Over 50 briefs in addition to the parties' briefs were filed in advance of the oral arguments. The Library of Congress website has posted a copy of all of the briefs filed for this matter.

Justices Scalia and Souter, based on the questions asked, seemed to be concerned about the effect of changing the Betamax rule would have on inventors and the development of new technologies. Several of the justices, appearing confused as to the procedural effect of ruling to affirm, asked questions exploring whether the case could be sent back to the district court to decide whether the file-swapping companies had actively "induced" computer users to trade copyrighted files. This would allow the justices to avoid making any major revisions to copyright law.

As with any Supreme Court hearing, the questions cannot serve as a predictor of a final ruling. However, it seems the Court may be looking to preserve the Betamax rule without the substantial overhaul that was feared by many of the technology companies in their amicus briefs.

The Supreme Court is expected to announce its decision later this summer most likely in June.

Posted by Geof at 1:49 PM | Comments (7664) | TrackBack