Supreme Court Grokster Decision on Internet File-Sharing Expected

22 June 2005

The Supreme Court is expected to issue its ruling on the controversial Grokster lawsuit about Internet file-sharing as early as today, and Christopher Ruhland, an Orrick litigator in Los Angeles who specializes in intellectual property in the media and entertainment industries, predicts a titanic impact whichever way the Court rules.

"The Court's decision will have enormous consequences for copyright owners and for those who currently thrive off of copyright infringement," said Ruhland, who previously worked for The Walt Disney Co., one of the plaintiffs in the case. "What is at stake is the value of the rights afforded by the Copyright Act."

The issue in the case, brought by MGM Studios and other movie studios and record companies, is whether the distributors of file-sharing software such as Grokster can be held responsible for copyright infringements committed by those who use their programs. In August 2004, the Ninth Circuit Court of Appeals in San Francisco held that Grokster is not liable for copyright infringement. The court ruled that because Grokster claims it does not have actual knowledge of what its users are doing and cannot stop its users from infringing, it cannot be held liable.

"The studios and record companies are asking the Supreme Court to plug a significant legal hole created by the lower courts," said Ruhland. "That hole allows Grokster and others to contribute to massive online infringement, and to escape liability as long as they stick their heads in the sand, so that they do not 'know' that their users are trading infringing copies of movies and music. The reality is that certain software programs were designed to allow users to commit copyright infringement, and that is exactly how those programs are being used."

Entertainment companies already have stepped up efforts to file lawsuits against Internet users who distribute movies and music illegally, and Ruhland said they may have to do more if the Supreme Court rules against them. "If the Supreme Court rules that Grokster's conduct is legal, that will encourage others to design similar systems online," Ruhland said. "The result will be an escalation of the free-for-all in the trade of unlawful copies of movies and music that already persists."

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Source: Business Wire

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