Reasoning of the Court

In Grokster v. MGM Studios, the district and appellate courts ruled against MGM Studios and in favor of Grokster because of the precedent of the Sony v. Universal Studios case in 1984 where Sony was found innocent from copyright infringement due to selling a product that could knowingly be used to record copyrighted material for personal use by the consumer; Sony knew this to be a unwanted side effect of the product but it wasn’t enough to warrant copyright infringement on behalf of Sony. Due to this the lower cases considered P2P (peer-to-peer file sharing via servers on the internet) of the same effect and ruled in favor of the company providing the material to conduct this business. The Supreme Court had noted that unlike Sony in 1984 whose product was for viewing of copyrighted material purchased on behalf of the user; Grokster’s software was made specifically for P2P and was exclusively for sharing files and products via servers on the internet, and specifically for sharing copyrighted and expensive material from one person in New York to someone in Hong Kong. Because of this brash difference in the basis of the companies and their product, Grokster was blatantly advertising itself as a “Napster alternative” in that it would get you the song or movie and what not that you wanted from someone you would never meet for a cost of next to nothing with no payment made towards the original producer of that material. The Supreme Court found this in violation of the Copyright Act and held Grokster and it’s associates fully responsible for all of the copyrighted material infringed upon on their servers using their software. This set a new precedent for copyrighted material and P2P software and servers on the internet, at least those based within the United States where jurisdiction is still held. This has helped bring down malicious software from its free roaming unobstructed reigns to at least stem the tide of P2P which is also a cesspool for viruses and Trojans on top of being a music and movie database from which to download.