In its recent and highly anticipated decision in MGM Studios, Inc. v. Grokster, Ltd., the U.S. Supreme Court appeared reluctant to make any significant changes to copyright law. The Court avoided comment on the vigorously debated definition of the "substantial noninfringing uses" standard from Sony Corp. v. Universal City Studios, Inc., affirmed the Sony doctrine without modifying it, and characterized the new inducement theory as a classic case of common law secondary liability. But in trying to limit the impact of its opinion, the Grokster Court said too little. It left significant ambiguities in its holding and many unanswered questions in copyright law.
The ambiguities and gaps in the legal rule of Grokster will make it very difficult for technology companies to predict their liability for copyright infringement. Instead of relying on the law of Grokster, technology companies need to focus on the facts of Grokster and identify which facts proved determinative of Grokster’s liability. By piecing together a rule from the facts of the case, technology companies can structure their conduct to avoid future liability for contributory copyright infringement and can prevent the stifling effect of an uncertain legal rule.
This Comment examines the Sony and Grokster opinions and the reasons why the legal rule from Grokster is too unclear to be predictive. The Comment then closely analyzes the Sony and Grokster opinions and identifies the key determinative facts that distinguish the two cases. Using these key facts, the Comment then turns to an analysis of the potential liability of three emerging technology companies, and presents a new view of Sony and Grokster from a factual perspective.