The Case of MGM v. Grokster

The Supreme Court Finally Steps Into The Fray Between Online File Swappers And The Major Movie And Recording Studios：

The Case of MGM v. Grokster

By JULIE HILDEN

Tuesday, Feb. 15, 2005

On March 29, the Supreme Court will hear arguments in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., a closely-watched case involving peer-to-peer file sharing - a process in which people send or receive music or movies over the Internet.

The most famous peer-to-peer file sharing site was, of course, Napster. However, after a number of rounds of litigation, Napster has now been transformed into a site that, for a monthly payment, allows only legal downloads of music （that is, downloads of copyright music for which a license has been granted）. Other sites, however, continue to offer peer-to-peer file sharing software despite the fact that one of its uses is to pirate copyrighted music and movies - and Grokster is one such site.

The Court's ultimate decision in MGM v. Grokster is very likely to be one of the landmarks of this term.

The Plaintiffs, the Defendants, and the Allegations in the Case

The list of plaintiffs in the case is a virtual "Who's Who" of influential Hollywood record and film companies. The defendants in the case are Grokster and StreamCast Networks - which provide software that allows peer-to-peer file sharing of music and movies on personal computers.

According to the plaintiffs, over 90% of the files that are actually exchanged using the software consist of copyrighted material that the swapper - that is, the person who makes files available for download on his or her computer - has no right to distribute. For this reason, the plaintiffs - who say they own the lion's share of the copyrights at issue - seek whopping damages against Grokster and StreamCast.

Their theory of liability holds that Grokster and StreamCast are responsible for the software users' copyright infringement - either because they contribute to users' infringement, or because the infringement is, in effect, their own. These two varieties of infringement are called "contributory" and "vicarious" infringement, respectively.

Will the Sony BetamaxCase Favor Defendants？

The last Supreme Court decision that seems closely analogous to this one was Sony Corp. v. Universal Studios Inc. - which was decided in 1984. It held that sellers of VCRs were not liable for users' copyright infringement - rejecting the claim that selling VCRs amounted to contributory infringement.

That holding, at first glance, sounds pretty good for the defendants in the MGM v. Grokster case： Like VCR makers, they, too, provide a means that enables copyright infringement on the part of some users, but not of all users. They, too, have created a new technology with a range of different uses, some legal and some illegal.

So shouldn't they, too, be off the hook - based on the Sony precedent？

The problem is, there's a big difference between VCRs and the software at issue here. At the time Sony was decided, the Court noted, the average American's use of his or her VCR was for "time-shifting" - that is, to record favorite television programs to be seen at a more convenient time. In short, VCRs were sort of like an old-time TiVo.

"Time-shifting" is a classic instance of "fair use" exempt from the copyright law. And in any event, as the Court pointed out, it would not seem to cause the typical kind of damages one sees in a copyright infringement case： lost profits from potential future legal sale of the copyrighted material.

In sum, the most common use of the VCR, according to the Supreme Court, was a legal one： time-shifting favorite television shows. In contrast, the average - indeed, the overwhelmingly likely - use of the software at issue in MGM v. Grokster is an illegal one： pirating copyrighted music and movies, which constitutes copyright infringement.

Indeed, the evidence shows that nine out of ten users use Grokster this way. （It is worth noting, though, that users whose use is perfectly legal actually do exist： Grokster offered the court affidavits from users who either were themselves copyright owners, or who were licensed to use the copyrighted material they distributed.）

In sum, the Court in Sony thought it was dealing with a mostly innocuous technology. But the Court in MGM v. Grokster knows it has a rattler, not a garden snake, in its hands. The idea, then, that the Court will blindly follow Sony here would be na？e. No matter how the Court decides this case, it will not be simply by applying past precedent.

Why the Stakes in the Case Are Potentially Momentous

The stakes in the case are very high, too - higher than in Sony. If the plaintiffs win, distributors of software that allows peer-to-peer file sharing will face immense damage awards that are likely to put them out of business - as well as, potentially, court injunctions that direct them to cease distributing their software.

The possibility would still remain, however, that the use of offshore servers and companies - which are beyond the jurisdiction of U.S. courts —— as well as of anonymity - you can't effectively hold an unknown person liable —— will mean that peer-to-peer file sharing continues. Thus, as I argued in a prior column, it may well be that this is, in effect, an unstoppable technology.

However, the Supreme Court's decision in favor of the plaintiffs would, at a minimum, impose practical impediments to peer-to-peer file sharing. It might also stigmatize peer-to-peer file sharing in the eyes of some - especially if the Supreme Court used stern language equating piracy to theft, and derogating peer-to-peer file sharing software as a criminal's tool.

It may be one thing for the record and movie industry - trying to preserve profits - to label file sharers criminal, and another thing for the Supreme Court - interpreting the law - to do so. On the other hand, though, some file sharers may only greet the Court's ruling with the same contempt they reserve for the RIAA's and MPAA's anti- piracy campaigns.

Importantly, too, courts have consistently held that when users swap copyrighted files without owning the copyright or having a license to do so, they are illegally infringing copyright. So suits against users will remain open-and-shut, no matter what the Supreme Court decides.

（Some theorists argue that sharing is "fair use," and thus exempt from copyright law. On their view, it is as innocuous as inviting one's friends over to listen to music, or lending them a DVD. But courts have held to the contrary： Unlike these practices, file-sharing typically involves some copying, or the equivalent - and thus, courts tend to see it as a straightforward copyright violation.）

On the other hand, if the defendants win, the market for peer-to-peer file sharing software will probably boom.

In addition, the software distributed by Grokster and StreamCast will provide a model of how to craft such software so that it passes legal muster； so those who seek to distribute similar software may simply opt to reverse-engineer the software that the Court has already blessed.

Who Will Win This Case Is Anybody's Guess

So who will win the case？ It is extremely hard to predict.

On one hand, I think it's unlikely that the Supreme Court will simply rule for the defendants, because the Justices will be uncomfortable with, in effect, licensing wide-scale copyright infringement.

The Court typically does not want to give its blessing to numerous instances of lawless behavior - remember, there's little, if any, question that peer-to-peer users are breaking the law - by otherwise law-abiding citizens. It might even fear that to do so, would create a scofflaw community where the attitude is, "It's okay as long as I don't get caught." And the Court is all too aware of the practical and public relations costs if companies must go after users one by one.

But on the other hand, simply ruling for the plaintiffs would also make the Justices uncomfortable, I think, in a different way： It's not the Court's job to censor American technology, and tell companies what they can and cannot create.

The upshot of this analysis is that the Court may reach for a compromise solution. One such solution might be to require Grokster and StreamCast to police their networks for users' infringement.

But there are reasons that the Court might be averse to this kind of solution, too： The Court probably is not much more inclined to tell software distributors how to interact with their customers, than it is inclined to tell them what software they can, and cannot, create and distribute.

In sum, a win for the defendants here seems lawless - as if it would, in effect, give a Supreme Court blessing to a possible scofflaw community. But a win for the plaintiffs seems somehow un-American - allowing courts to tell companies what to do, even though the companies aren't themselves breaking the law.

We don't even do this with gun manufacturers whose products are used by some to kill. Is the Supreme Court likely to mandate it for mere software distributors whose products are used by some to infringe copyright？

Given Flexible Legal Standards, the Court Has Substantial Freedom Here

One thing is clear： The law in this area is malleable enough that it can be argued either way. For instance, "contributory infringement" requires that the software distributor "materially contribute" to users' infringement of copyright, and have knowledge of it. But what kind of contribution is, or is not, "material"？

There's the rub. Grokster makes illegality possible - but when the illegality happens, later, it's through the user's own choice. So has Grokster made a "material contribution" - or virtually no contribution at all？

Similarly, when software is later used by many to infringe, and some to legally distribute files, does the software maker have "knowledge" of infringement？ This is another requirement for contributory infringement - and, like the material contribution requirement, it's susceptible to debate： For instance, does the software maker have to know about a particular instance of infringement, or is the general knowledge that the product is being used to infringe copyrights - which Grokster surely has by now —— enough？

Similar difficult questions arise within a theory of "vicarious" infringement. A key question is： Did the software distributor have the "right and ability" to supervise for infringement？

How might the distributor reserve the right and ability to supervise for infringement？ It might require users to agree to provide copyright registration or licenses for each use of the software. Obviously, that would be quite burdensome for the user. And doing so might only put the distributor in a worse legal position： Ironically, this test seems to suggest that the distributor will be better off if it remains ignorant of illegal uses, for then it cannot be held vicariously liable for them.

Some courts might want to address this irony by saying that the distributor must reserve this right and this ability - and thus must expose itself to a vicarious infringement claim. But arguably, a court that forced this, might be going too far.

Given that Congress has not specifically required the inclusion of such provisions in the relevant contracts, should courts interpreting copyright law take it upon themselves to tell Grokster how to structure its software, and force it to police its own users？ Or should the onus be on copyright owners to devise "lockware" that makes illegal uses of particular files impossible？

Reasonable minds can differ on the answers to all these questions, I think - and for this reason, the Supreme Court will likely feel free to make law, rather than to simply interpret it, in this crucial case.

米高梅诉格罗斯特案

朱莉希尔登

2005，2，15，星期二

在3月29日，最高法院将听取米高梅公司诉格罗斯特有限公司一案的辩论，一个有关对等文件共享—人们通过网络传递或者接收音乐或者电影的过程—被密切关注的案子。

最著名的对等文件共享网站当然是，耐伯斯特。但是，在许多轮诉讼之后，耐伯斯特现在已经转变成为这样的网站，按月支付的，只允许合法的音乐下载（那是，下载已经授予许可的版权音乐）。别的网站，仍然，继续提供对等文件共享软件而不考虑它的某一次使用侵犯了享有著作权音乐和电影—格罗斯特就是一个这样的网站。

法院在米高梅诉格罗斯特案中的最终判决可能成为这一任期具有划时代意义的判决之一。

原告，被告，和案中的主张

本案的原告名单是一个有影响的好莱坞录音和电影公司的虚拟的“谁是谁”。本案的被告是格罗斯特和流传播网络—它们提供支持个人电脑对等音乐电影文件共享的软件。

根据原告诉称，超过90%的实际使用这个软件进行交换的文件是由那些交换者—就是，利用他或她的电脑使文件可以下载的人—无权传播的，具有著作权的材料构成。基于这个理由，原告—享有案件中著作权最大份额的人—对格罗斯特和流传播寻求庞大的赔偿。

他们的责任理论认为格罗斯特和流传播应该为软件使用者的版权侵犯行为负责—因为他们对使用者的侵权行为做了贡献，或者因为侵权行为，在效果上，他们也有份。这两种侵权分别被称做“贡献的”和“替代的”侵权。

索尼比特麦克斯案会对被告有利吗？

最高法院上一个看起来与此案十分类似的判决是索尼公司诉环球电影公司案—它是在1984年做出的。它认为录像机的销售者对使用者的侵犯著作权的行为不负责任—驳回出售录像机构成帮助侵权的请求。

这个裁决，乍看起来，对美高梅诉格罗斯特案的被告十分有利：就像录像机的制造者，他们，也，提供了使部分使用者可以侵犯著作权的手段，但是不是所有的使用者。他们，也，创造了拥有广泛使用者的新科技，一些人合法还有一些人不合法。

所以他们就也不用，像脱离了钓钩—基于索尼的先例？

问题是，在录像机和本案的软件之间有一个很大的不同。索尼案判决的时候，法院解释到，通常美国人使用他或她的录像机是为了“改变时间”—就是，录制喜欢的电视节目在一个更方便的时候观看。简单的说，录像机就是类似老式留言电话的一种东西。

改变时间在知识产权法中是一个典型的公平使用的例子。并且在任何时候，就像法庭指出的那样，它不会看起来像能够造成人们在侵权案件中看到的那种典型的损害：失去潜在的将来合法出售享有知识产权的材料所取得的利益。

总体上，录像机最普遍的使用，依照最高法院，是合法的：改变喜欢的电视节目的时间。相反，通常—真正地，很大可能—对米高梅诉格罗斯特案中软件的使用是不合法的：侵犯了音乐和电影的专利权，构成著作权侵权。

确实，证据显示十个使用者中有九个这样使用格罗斯特。（很值得注意的是，虽然这样，事实上存在完全合法使用的用户：格罗斯特提供了一份使用者的法庭宣誓书，他们有的是著作权的拥有者，或者他们被授权使用其所传播的享有著作权的材料。）

总之，在索尼案中法庭认为它处理的是一个通常无伤大雅的技术。但是米高梅诉格罗斯特案中法庭知道它拿的是一条响尾蛇，不是一条花园里的蛇，在它的手中。所以，这种想法，法院会盲目地遵循索尼案是很天真的。不论法院如何判决，它都不会简单地适用过去的先例。

为什么这个案子的代价是潜在地重大的

这个案子的代价也很高，高于索尼案。如果原告胜诉，允许对等文件共享的软件的发布人将要面对巨额的损害赔偿，可能导致它们倒闭—潜在地，法庭要求他们停止传播他们软件的禁令也会这样。

可能性仍然存在，无论如何，海外服务器和公司的使用—它们在美国法庭管辖权之外—还有匿名—你不能有效地让一个不知名的人承担责任—会意味着对等文件共享还会继续。这样，就像我在上一篇专栏中指出的那样，这有很大可能是，在效果上，无法阻止的技术。

无论如何，最高法院倾向原告的判决会，即使在最小程度上，对对等文件共享设置实际的阻碍。它也会在一些人眼中给对等文件共享打上不好的烙印—特别地如果最高法院使用严厉的措辞把侵权等同于盗窃，并且贬损对等文件共享软件为犯罪的工具。

录音和电影工业—努力保护利益—使文件共享成为犯罪是一回事，最高法院—解释法律—这样实施是另一回事。另一方面，尽管如此，一些共享者可能用他们为美国录音工业协会和美国电影协会反盗版运动保留的同样的蔑视来回应法院的裁决。

同样重要地，法庭一贯认为当使用者不拥有著作权或者没有被授权就去交换享有版权的文件，他们就是非法侵犯著作权。所以起诉使用者将是显而易见的，不论法庭如何判决。

（一些理论者争辩说共享是“公平使用，”并且因此根据著作权法免除责任，它就像邀请朋友过来听音乐，或者借给他们一部dvd.但是法庭认为正相反：不同于这些实际，文件共享代表性地包括拷贝，或者同样的行为—因此，法庭倾向于认为它是直接的侵犯著作权。）

另一方面，如果被告获胜，对等文件共享软件的市场将可能会兴隆起来。

另外，由格罗斯特和流传播公司发布的软件将提供一个制作合法的类似软件的典范，所以那些寻求发布类似软件的人会简单地选择反编译这个法庭业已保护的软件。

所有人都在猜测谁会赢得这个案子

那么谁会赢得这个案子呢？这很难去预测。

一方面，我认为最高法院不可能去简单地做出有利于被告的裁定，因为法官会觉得实际上放纵了范围广阔的著作权侵权而不舒服。

法庭普遍地不想给予为数众多的不法行为的保护—记住，这样的时候很少，如果有的话，问题是对等的使用者违反了法律—超过其他的守法公民。这样做会很恐怖，将会造成一个藐视法律的社会，他们的态度是“只要我没有被抓住，就万事大吉。”并且法庭都明白实际的和公共关系的花费，如果公司必须一个一个地照顾他们的使用者。

但是另一方面，简单做倾向于原告的裁决也会让法官不舒服，我认为，从一个不同的观点看：检查美国科技并且指示告诉他们可以做什么不可以做什么不是法院的工作。

分析的结果是法庭可能达成妥协的解决方案。一种这样的方案可能是要求格罗斯特和流传播去监管他们的网络防止使用者侵权。

但是法庭也有理由去反对这种解决方案：法庭不倾向于告诉软件发布者他们可以或者不可以创造什么和传播什么，就像它可能不倾向于告诉软件发布者如何去与他们的顾客交流。

总之，被告的胜利看起来会不合法—因为它在效果上保护了一个可能的藐视法律的社会。但是原告的胜利看起来有点不美国—授权法庭去告诉企业什么可以做，甚至企业自己并没有违法。

我们甚至没有对其产品被一些人用来杀人的枪支制造企业做这些。最高法院可能会这样做吗仅仅因为软件发布者的软件被用来侵犯著作权？

假定可变通法律标准，法庭在这里有真实的自由

一件事是清楚的：在这个领域的法律是足够可塑的可以用不同的方式争辩。例如，“贡献侵权”要求软件发布者“实质地贡献”于使用者的侵权，并且知道它。但是什么样的贡献是，或不是“实质的”？

难就难在这儿。格罗斯特使不法行为成为可能—但是后来当不法行为发生时，它是根据使用者自己的选择。所以格罗斯特做出了“实质的贡献”—或者事实上根本就没有什么贡献？

同样地，当软件后来被许多人用来侵权，还有一些用于合法地传播文件，是否软件制作者知道侵权？这是另一个对贡献侵权的要求—并且，像实质贡献侵权要求，争论是没有定论的：例如，是否软件制作者必须知道一个侵权的特定例子，或者是否对软件被用来侵犯著作权有一般的了解—格罗斯特现在确定了解—就足够？

同样困难的问题也产生于代理侵权的理论。主要问题是：是否软件发布者有“权利和能力”去对侵权监督？

发布者怎样才能保留权利和能力去对监督侵权？可能要求使用者同意每次使用软件时提供著作权登记或者授权。显然，那对使用者来说是很繁重的。而且这样做可能仅仅把发布者置于一个更糟糕的法律地位：讽刺地，这个测试看起来建议发布者最好离开如果它保持对非法使用置之不理，因为那样它就不能被要求为它们负代理的责任。

一些法庭可能会提出这个反语通过说发布者必须保留这个权利和能力—并且因而必须使它自己暴露于代理侵权诉讼。但是可以争论地，一个强制这样做的法庭未免走的太远了。

假定议会没有特别要求在相关合同中包括这样的条款，解释著作权法的法庭能够赋予自己权力指示格罗斯特如何构建它的软件，并且强制它去监管它自己的用户？或者添置“锁定软件”使特定文件的非法使用变得不可能的责任应该由著作权所有者承担？

合理的思维能够区分所有这些问题的答案，我认为—并且根据这个理由，最高法院可能会自由的造法，而不是简单地解释它，在这样一个及其重要的案子中