This particular case involved Universal City Studios and the Sony Corporation of America, and is most often referred to as "the Betamax case." In 1976, Sony introduced their Betamax VCR, and used the machine's ability to record television as a marketing strategy. Universal City Studios countered that Betamax's technological ability to copy programming for was a direct copyright infringement. Sony argued that their consumers had the right to record various programs in the privacy of their own home. Rulings and appeals were traded back and forth until the case reached the Supreme Court in 1984 The Court eventually ruled that the company itself could not be held accountable for its creation of a new technology, even if said technology is used for specific infringements of copyright law. As long as the technology can be used for legal purposes, then the manufacturer is not at fault for any user infringements. The court's reasoning behind this ruling was that the public should not be deprived of a productive technology simply because some users choose to use the product unlawfully. This case may in fact be the most important copyright infringement case in regards to how it affects and influences the decisions made regarding piracy and, specifically, peer-to-peer file sharing. Another extremely famous case of MGM versus Grokster used the ruling of this case to argue in their defense. It provides a great point of reference for my paper, as it shows the way in which the early beginnings of piracy were dealt with on a legislative basis.
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.