“Sony Corp. of America v. Universal City Studios, Inc.” was a significant decision in copyright law dealing with new technologies that made it possible to record copyrighted television shows. The ruling in this case, also referred to as the “Betamax Case” which was the original VCR player that Sony produced, was that time-shifting is within the boundaries of fair use and is not copyright infringement. The court said that the manufacturers of such products could not be held liable for copyright infringement. This would come up during the Grokster case and it would ultimately be decided that manufacturers could be held liable if the product was intended to be used for infringing on copyrighted material.

The court stated that private time-shifting was a significant non-infringing use of the new technology. The court went on to say that just because some people could use the device for copyright infringement, the fact that there are substantial legal uses for it outweighs that. If the nature of the reproduction of works was non-commercial and non-profit then the court saw that there was nothing wrong with it.

It is quite ironic that Disney, who fought to keep Sony from producing the Betamax, was actually one of the biggest beneficiaries of the new home video technology by making a lot of money off of home videos. This case is important for my argument because this ruling has become the standard to which other copyright infringement cases have been held to for many years. The ruling in the Grokster case changed this precedent slightly by making the producer liable if it could be shown that they somehow encouraged or facilitated illegal copyright infringement.

This article is written by the Center for Democracy and Technology, a non-profit interest group that “seeks to promote free expression, privacy, and individual liberty on the open, decentralized internet.” This document “outlines the limits on the scope of secondary copyright liability,” looking at the Grokster decision, the landmark decision in Sony Corporation of America v. Universal City Studios, Inc. (1984), and patent law precedents relating to inducement liability. The goal of this investigation is to make sure that "secondary liability for copyright infringement does nothing to compromise legitimate commerce or discourage innovation having lawful promise.’” The Grokster case and the Sony decision can obviously be looked at be looked at individually, but this article does a nice job of synthesizing the information and explaining how they impact each other.

The article focuses on the new implications of the “inducement test,” what repercussions the situation has for the Sony rule and what this all means for vicarious liability. The article focuses on one key difference in clarification between the Grokster and Sony decisions. The language in the Grokster decisions "suggests that the Sony test focuses on 'substantial' non-infringing uses, not 'commercially significant' non-infringing uses." With Grokster, the emphasis was certainly placed on the commerical uses of the site. Monetary gains became one of the most significant factors of the case, not just ethical or legal implications. Certainly the internet is just as much a business as any other commerical frontier in the world, but more and more - especially illustrated with the Grokster decision - financial viability is the determining legal decision making. For example, today YouTube is currently seen as protected by the safe harbor provison, although some of the content being posted on YouTube today was possibly (or probably) also availible on Grokster. YouTube has been able to position itself not only in a safe harbor in a legal sense, but also in a financial sense by teaming up with companies who own many of the copyrighted works that are being infringed.

Of course the Sony case was also motivated by money, but more than ever before the current world of the web and the sites that are allowed to function within its borders are completely a function of their monetary potential for copyright holders. Grokster was taken to court because it posed a threat to the financial success of copyright holders. YouTube poses a similar threat as well, but thus far has been able to keep in partnership with the people who would be taking them to court in the first place.