Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. (2005)

“One who distributes a device with the intent to induce copyright infringement is liable for resulting violations.”

Short Description :

This case addressed the liability of technology providers whose products could be used for copyright infringement. The Supreme Court held that companies encouraging or intending infringement can be held responsible, even if their devices have legitimate uses.

Facts :

Grokster and StreamCast developed software that allowed users to share music and movies peer-to-peer. Although the software had legal uses, it was widely used for copyright infringement. MGM and other studios sued, arguing that the companies were inducing infringement. Grokster claimed it was not liable because the software could be used legally.

Findings / Reasoning :

The Supreme Court ruled that intent matters. Companies that actively promote or encourage users to infringe copyright cannot escape liability. The Court distinguished between mere capability and active inducement. Even if the software has substantial lawful uses, promoting illegal use makes the distributor liable.

Suggestions / Observations :

Technology creators must ensure they do not market or instruct consumers to violate copyright. Mere passive knowledge of infringement is insufficient; active inducement is key. This ruling balanced innovation with protecting intellectual property.

Judgment & Date :

Judgment in favor of MGM Studios and other plaintiffs.

Date : June 27, 2005.