The US Supreme Court has agreed to review one of the most controversial copyright law decisions of the last 25 years. The 9th Circuit US Court of Appeal had ruled on 19 August 2004 that online Peer-to-Peer (“P2P”) file-sharing services could not be held contributorily or vicariously liable for aiding copyright infringement.
The decision of the Circuit Court relied on the 1984 decision in the “Sony Betamax” case. In that case, the US Supreme Court found that because Sony’s Betamax video tape recorder was capable of “commercially significant non-infringing uses”, constructive knowledge of the infringing activity could not be implied. That is, because the fact that Sony knew the Betamax, generally speaking, could be used for infringement did not necessarily mean that Sony was liable for infringement of copyright.
The better-known Napster decision in 2000 went against the P2P service because the company housed and controlled the servers that searched for the digital files that users then downloaded. Grokster and other similar services, however, now operate decentralised systems that allow direct access between users. The Circuit Court also relied on this lack of control to establish that the P2P service had no vicarious liability.
One notable (and possibly crucial) difference between the two cases is that, while Betamax concerned the copying of broadcasts (which are time-dependent and therefore subject to the “time-shifting” exception), Grokster concerns copies of discrete works like songs and movies to which the time-shifting exception and other broadcast-specific issues do not apply.
Among the many claimants against Grokster are the Motion Picture Association of America, the RIAA, Warner Brothers and a class of 27,000 music publishers and composers. The decision may come as early as June 2005.
The full text of the Grokster Circuit Court judgment can be accessed via http://www.ca9.uscourts.gov/