Issue of the case

"This case raises a question of critical importance at the border between copyright and innovation"

http://www.publicknowledge.org/issues/grokster

This case is considered similar and categorized in the same issues in the Sony Corp. vs. Universal City Studios back in 1984. That case as well also protected VCR manufacturers from liability for contributory infringement. The issue here is whether or not Grokster’s creation is illegal due to copyrighting infringement. Case ended in June of 2005 with the Supreme Court issuing its ruling in MGM vs. Grokster. Ruling that the providers of the software that designed to allow “file-sharing” of copyrighted items may be held liable for the copyright infringement that takes place using that software. The case resulted in a crucial U.S. Supreme Court ruling, ruling that two file-sharing software manufacturers were found guilty of promoting file piracy. At the same time, the Supreme Court also ruled that file sharing itself is not illegal. So while the MPAA (Motion Picture Association of America) and RIAA (Recording Industry Association of America) are claiming this is a massive win for the entertainment industry, it really is a massive win for the world of P2P file sharing.

"In a case spanning several months, the US entertainment industry (in the form of MGM movies, and backed by the MPAA and RIAA) claimed that Grokster.com and StreamCast.com were liable for copyright damages because they encouraged the illegal sharing of movies. These two manufacturers were actively marketing software products that assisted in the downloading of pirated movies and songs"

http://netforbeginners.about.com/od/p2plegalitiesandethics/a/grokster.htm

"In their defense, Grokster and StreamCast claimed the Supreme Court 1984 "Betamax" defense. This Betamax ruling asserts that a VCR manufacturer is not responsible for a VCR user copying movies illegally."


http://netforbeginners.about.com/od/p2plegalitiesandethics/a/grokster.htm

The district court disagreed with MGM, granting partial summary judgment in favor of Grokster as to liability arising from its present distribution activities. MGM appealed the decision to the Ninth Circuit Court of Appeals.

http://www.law.duke.edu/publiclaw/supremecourtonline/certgrants/2004/mgmvgro.html