The US Supreme Court unanimously overturned the Ninth Circuit Court of Appeals ruling in Grokster v. MGM, which tested whether companies running file sharing services could be held indirectly liable for copyright infringement. The court found that Grokster encouraged infringement and marketed itself as a Napster alternative. The court considered evidence supplied by MGM statisticians that 90% of works exchanged on Grokster were infringements. The court ruled against Grokster, but refused to overturn its Sony v. Universal City Studios ruling that a distributor of a technology cannot be held liable for user infringement as long as the device is capable of "significant non-infringing use." This suit was also brought against the makers of Morpheus and KazaA software and found them to also be guilty of copyright infringement. The court used its ruling to devise a new framework for dealing with peer to peer file sharing programs that relies on "inducement" of users to infringe copyright.

The inducement rule set forth by the Supreme Court has become a great source of uncertainty in digital music copyright. The court has left open the degree to which peer to peer file sharing services should police their networks and what other measures should be taken to prevent infringement. This ruling has left room for innovators to produce new technologies (many currently exist) that are capable of evading copyright infringement action.

            Unlike the other cases I will discuss in my paper, MGM v. Grokster actually appears to contradict my thesis.  Grokster distributed free software products that allowed computer users to share electronic files through peer-to-peer networks.  MGM sued Grokster for their users' copyright infringements.  They claimed that Grokster knowingly and intentionally distributed their software to enable their users to reproduce and distribute their copyrighted works.  The Supreme Court decided in favor of MGM, which would seem to be bad for Google.

            While both and Grokster and Google seem similar, in fact, their differences, in the eyes of the Court are actually very important.  Both involve a type of peer-to-peer file sharing which may or may not involve items that are copyrighted.  MGM showed that Grokster's services contained more than 90% copyrighted material.  In fact, this information did not surface until the case was brought to the Supreme Court.  Without this information, the Appellate Court decided in favor of Grokster with the main reason being that they distributed non-copyrighted material.  While I have no proof that most of Google's images are in fact not copyrighted, it is Perfect 10's job to bring that information forward.  Since they have not, one can only assume that Google's image search contains mostly Fair Use images.

            Another reason why Google differs greatly from Grokster is the purpose behind their service.  Grokster, following the Napster case, had an advertising campaign targeting the users who were looking for an alternative to Napster.  This means that they were targeting people who had been illegally downloading on Napster.  Hence, their main source of revenue is from the file sharing of copyrighted works.  Google, on the other hand, has shown no evidence of focusing on copyrighted works.  Their technology is set up like Grokster in that they do not always know what links are being shared, but their main focus is greatly different.  It is the difference in philosophies and the users' use of the services that shows that Grokster is not a good comparison with Google.

The Supreme Court case MGM vs. Grokster (2005) is looked upon as one of the most important copyright infringement cases ever. In this case, media giant MGM sued the companies Grokster and Streamcast, the makers of file sharing program Morpheus. Grokster and Streamcast were unanimously convicted by the Supreme Court for providing and marketing their software, Morpheus, that induces copyright infringement. Morpheus was available to users for free and enabled them to partake in P2P file sharing.

This case is relevant to my paper because it further argues the issue of illegal P2P file sharing. It shows that many people choose to obtain their music from sources like Morpheus. It is also important because after seeing the results of the case, people have not ceased to illegally download music and movies. This furthers my thesis because it demonstrates that completely prohibiting P2P file sharing is probably impossible, and that the true solution may lie in finding a legal way to share files (voluntary collective licensing!).

The court decision resulted in makers of file sharing software being held responsible for the copyright infringements performed by their members. Today, programs, such as Lime Wire, that can be joined at no cost and allow members to share files still exist; yet they strategically avoid law suits by displacing the illegal activity on users, who must agree to a statement verifying that they will not use the software for copyright infringement.

While this case is an excellent example of P2P file sharing, I think what is most fascinating and integral to my paper is its aftermath. The fact that three years after this ruling, people have not been scared away from file sharing. It is an increasingly popular way to obtain music, and shows that perhaps this method can be used to recording artists advantage. With voluntary collective licensing, they will generate revenue all while their music is gaining awareness popularity over the internet.