MGM v. Grokster: Judicial Activism or a Good Decision?

Abstract:     
The Supreme Court decision in MGM v. Grokster is the latest skirmish in the copyright wars. After Grokster content owners can sue companies for distributing software that enables third parties to engage in copyright infringement. Grokster enunciates a secondary liability theory which provides for liability for inducing copyright infringement when a company distributes a product with the clear intent that third parties will use it to engage in direct infringement. This theory, although not statutorily recognized in the Copyright Act, is engrafted onto the Act by the Court. Despite arguments that such action is judicial activism inducement liability has clear roots in unfair competition law which recognizes that it is improper to intentionally induce a third party to engage in illegal conduct. Hence, the focus of inducement theory is the culpable conduct of the inducer. Grokster recognized the conflicting goals which had to be balanced: protecting intellectual property to promote creative activities; and, the importance of not impeding creative and innovative conduct. Limiting liability to intentional inducement strikes a proper balance because no underlying policy consideration supports allowing such conduct. Finally, this article examines the implications of Grokster by analyzing whether the sale of iPods and digital video recorders would support an inducement claim.

Keywords: Copyright, inducement, Grokster, Napster, Music, downloading, secondary liability, Sony, iPod, MP3, Tivo, DVR, RIAA, fair use, contributory liability,

JEL Classifications: K00, K10, K11, K20, K40, K42

Accepted Paper Series