Supreme Court Takes Grokster Case


The Supreme Court Friday said it will review whether TV and movie producers can hold file-sharing networks like Grokster Ltd. and StreamCast Networks Inc. liable when individuals use their software to illegally copy content.

The court’s decision to take the case thrilled Hollywood, which was disappointed by a lower court ruling that Grokster and StreamCast are not liable for copyright infringement because they don't maintain centralized indexes of files available for sharing.

Grokster and StreamCast systems disburse indexes among users' privately owned computers.

The San Francisco federal appeals court ruled in August that feature was enough to insulate the networks from legal challenges that got Napster, another peer-to-peer network, in trouble.

The same court ruled in 2000 that Napster's centralized system was illegal. “Companies such as Grokster and StreamCast that openly profit from the misuse of copyrighted materials while attempting to avoid legal liability should not be protected by the courts,” said Dan Glickman, president of the Motion Picture Association of America. “Our laws recognize that a flourishing digital economy depends upon upholding fundamental copyright principles and therefore such companies must be held accountable.”

MPAA insists that distributors of Grokster and StreamCast software should be liable for facilitating copyright infringement when the software is used for illegal swapping. But the court said the networks have clear non-infringing uses--they are valuable tools for sharing public domain content--and that general knowledge by the software companies that they were being used to violate copyright was not the same as knowledge of specific violations or the ability to control such violations, both of which could have triggered liability.