Copyright Law
Ronald W. Staudt
Class 26
November 26, 2013
Facilitation of Infringement by
End Users
Sony
Abdallah
Cartoon Network
Napster
Grokster
Sony
 Facts
 Dance halls v. landlords, again
 Patent anology271(b)- active inducement
271(c)- contributory infringers AND staple article of commerce
defense (“unsuited for any commercial noninfringing use”)
 “Capable of substantial noninfringing uses”
Search for a “commercially significant noninfringing use:
Private noncommercial time shifting in the home
• Of the works of other copyright holders who authorize the use
• Even P’s work though unauthorized is legitimate fair use
Staple Article of Commerce Rule as applied
by Sony to copyright cases involving the
sale of copying equipment:
Widely used for legitimate unobjectionable
purposes—merely capable of substantial
noninfringing uses
Capable of commercially significant
noninfringing uses
A significant number of potential uses of the
machine would be non-infringing
No need to give precise content to the
question of how much use is commercially
significant because:
Private noncommercial time shifting
satisfies standard
Applying Sony
Abdallah
Time loaded cassettes and Sony
• “staple article or commodity?”
• Substantial? non-infringing use
• Additional actions
Cartoon Network
Would Sony defense work?
A & M Records, Inc. v. Napster, Inc.
Napster’s operations
Contributory Infringement
Knowledge
Sony and imputed v. actual knowledge
DC focused too much on current rather than potential uses
BUT evidence shows D had actual knowledge of specific
infringing material, that it could block and failed to remove
Contribution
Fonovisa“site & facilities”
Vicarious Infringement
Direct Financial Interest
Right and Ability to Supervise
“right to police must be exercised to the maximum
extent…”
no “blind eye” cf Aimster
How
Napster
Worked
Source of this graphic is:
http://www.limewire.com/englis
h/content/development.shtml
How a Gnutella client finds a song
How a Gnutella client finds a song
 Given that there is no central server to store the
names and locations of all the available files, how
does the Gnutella software on your machine find a
song on someone else's machine? The process goes
something like this:
You type in the name of the song or file you want to find.
Your machine knows of at least one other Gnutella machine
somewhere on the network. It knows this because you've
told it the location of the machine by typing in the IP
address, or because the software has an IP address for a
Gnutella host pre-programmed in. Your machine sends the
song name you typed in to the Gnutella machine(s) it knows
about.
MGM v. Grokster (9th Cir.)
Indirect liability requires direct infringement by
end users
Like Napster, evidence establishes direct reproduction
and distribution
Contributory InfringementKnowledge- if product is capable of substantial
noninfringing use, then reasonable knowledge of
specific infringement needed, not constructive or
generic knowledge
• Evidence of Wilco success, public domain searches, Project
Guttenberg, the Prelinger Archive etc
• ( Aimster variation about probability of infringing uses)
• Specific knowledge at a time when Ds contribute and
failed to act on the information.
Grokster’s reasonable knowledge
of specific infringement (9th Cir.)
As the district court correctly observed, …
“Plaintiffs’ notices of infringing conduct are
irrelevant,” because “they arrive when
Defendants do nothing to facilitate, and cannot
do anything to stop, the alleged infringement”
of specific copyrighted content. Id. at 1037.
See Napster II, 284 F.3d at 1096 (“[P]laintiffs
bear the burden to provide notice to Napster of
copyrighted works and files containing such
works available on the Napster system before
Napster has the duty to disable access to the
offending content.”)
MGM v. Grokster (9th Cir.)
Material Contribution
Does Grokster contribute like Napster or an ISP or a
swap meet?
Need “personal conduct that assists or encourages” Fonovisa
Napster was the axis of the file sharing wheel- when it closed
the network disappeared. Netcom had similar power to stop…
Grokster distributes code – no source access
no network, not even a supernode
“When users search…using Grokster…[no] information
[is] being transmitted to or through any computers
owned or controlled by Grokster…”
Grokster’s material
contribution (9th Cir.)
[I]t is the users of the software who, by
connecting to each other over the internet,
create the network and provide the access.
“Failure” to alter software located on another’s
computer is simply not akin to the failure to
delete a filename from one’s own computer, to
the failure to cancel the registration name and
password of a particular user from one’s user
list, or to the failure to make modifications to
software on one’s own computer.
MGM v. Grokster- Supreme Ct.
Facts stressed by the Supreme Court
Value of peer to peer and legitimate uses
90% of downloads are © materials
Staggering number of copies
Ds have notice –MGM notice of 8 million files
Ds’ objective and active steps
OpenNap Swaptor and name of D
Promotion marketing intention to promote
Business model based on volume driven by © works
No blocking, no monitoring
Grokster --Supreme Court
9-0 “Majority” opinion
Sony does not preclude liability for intentional
inducement.
Concur by Ginsburg, Rehnquist & Kennedy
9th Circuit wrong on Sony. More evidence needed to
establish “capable of substantial noninfringing use.”
Concur by Breyer, Stevens & O’Connor
Sony’s balance aimed at protecting technology
development is working and 9th Cir.decision on Sony
has “adequate legal support.”
Grokster - Supreme Court
Majority
 In sum, this case is significantly different from Sony and
reliance on that case to rule in favor of StreamCast and
Grokster was error. Sony dealt with a claim of liability
based solely on distributing a product with alternative
lawful and unlawful uses, with knowledge that some
users would follow the unlawful course. ***
MGM's evidence in this case most obviously addresses a
different basis of liability for distributing a product open
to alternative uses. Here, evidence of the distributors'
words and deeds going beyond distribution as such
shows a purpose to cause and profit from third-party
acts of copyright infringement. If liability for inducing
infringement is ultimately found, it will not be on the
basis of presuming or imputing fault, but from inferring a
patently illegal objective from statements and actions
showing what that objective was.
The Grokster Inducement Rule
 We are, of course, mindful of the need to keep from
trenching on regular commerce or discouraging the
development of technologies with lawful and unlawful
potential. Accordingly, just as Sony did not find intentional
inducement despite the knowledge of the VCR
manufacturer that its device could be used to infringe,
mere knowledge of infringing potential or of actual
infringing uses would not be enough here to subject a
distributor to liability. Nor would ordinary acts incident to
product distribution, such as offering customers technical
support or product updates, support liability in themselves.
The inducement rule, instead, premises liability on
purposeful, culpable expression and conduct, and thus does
nothing to compromise legitimate commerce or discourage
innovation having a lawful promise.
Grokster Inducement
Evidence
Aiming to satisfy Napster market
Failure to develop filtering mechanism
But see Footnote 12
Business Model based on infringement
Ginsburg v. Breyer
 JUSTICE BREYER finds in Sony a "clear" rule permitting
contributory liability for copyright infringement based on
distribution of a product only when the product "will be
used almost exclusively to infringe copyrights." Post, at
9-10. But cf. Sony, (recognizing "copyright holder's
legitimate demand for effective -- not merely symbolic -protection").
 JUSTICE GINSBURG—”Sony, as I read it, contains no
clear, near-exclusivity test. Nor have Courts of Appeals
unanimously recognized Justice Breyer's clear rule.
…Justice Breyer finds support for summary judgment in
this motley collection of declarations and in a survey
conducted by an expert retained by MGM.
Ginsburg’s conclusion
 In sum, when the record in this case was developed,
there was evidence that Grokster's and StreamCast's
products were, and had been for some time,
overwhelmingly used to infringe,…, and that this
infringement was the overwhelming source of revenue
from the products. Fairly appraised, the evidence was
insufficient to demonstrate, beyond genuine debate, a
reasonable prospect that substantial or commercially
significant noninfringing uses were likely to develop over
time. On this record, the District Court should not have
ruled dispositively on the contributory infringement
charge by granting summary judgment to Grokster and
StreamCast.
Breyer’s Conclusion
 There may be other now-unforeseen noninfringing uses
that develop for peer-to-peer software, just as the
home-video rental industry (unmentioned in Sony)
developed for the VCR. But the foreseeable development
of such uses, when taken together with an estimated
10% noninfringing material, is sufficient to meet Sony's
standard.
 Of course, Grokster itself may not want to develop
these other noninfringing uses. But Sony's standard
seeks to protect not the Groksters of this world (which
in any event may well be liable under today's holding),
but the development of technology more generally. And
Grokster's desires in this respect are beside the point.
Breyer’s Take on Sony
Sony’s rule is
Clear
Strongly technology protecting
Forward looking
Mindful of the limitations facing judges where
matters of technology are concerned
Modified rule would weaken the law’s ability to
protect new technology
Positive © impact may not outweigh technology
related loss