Grokster - Rest In
Peace
By: Richard A. Chapo
Grokster fought the law and the law won. Having lost in a Supreme
Court ruling, Grokster has shut down and settled with the recording
and movie industry.
Grokster - Rest In Peace
Facing up to a Supreme Court decision against them, Grokster has
settled with the music and movie industries. The company has agreed
to pay $50 million dollars in damages and terminate its file
file-sharing system. A visit to the Grokster site now shows one page
noting the ruling and the intention of the company to come up with a
legal alternative.
The decision of the Supreme Court in MGM v. Grokster was a surprise
too much of the legal community. Lower courts had almost universally
found in favor of Grokster using a theory validated in the 1970s
cases involving VCR machines. In those cases, courts noted the
makers of VCR machines could not be held responsible for the actions
of users. The crux of the argument was the machine could be used for
both legal and illegal purposes, so liability could not be found.
In deciding against Grokster, a
unanimous Supreme Court upheld this legal theory. However, the Court
noted Grokster had actively promoted itself as a method for pursuing
file sharing, an act the Court found to constitute copyright
infringement. As such, the Court ruled that Grokster could be found
liable for copyright infringement. The decision effectively killed
Grokster as a business entity.
File Sharing Impact
Although Grokster bit the dust, much of the file-sharing industry
continues to function. Companies such as Morpheus continue to do big
business and fight the entertainment industry. This is made possible
by the Grokster decision, which requires the entertainment industry
to show intent to promote copyright infringement on the part of
companies such as Grokster and Morpheus. Arguably, Grokster could
start a new service tomorrow and avoid problems so long as it didn't
promote illegal file sharing as a benefit of its service.
File sharing on the Internet is not dead. The entertainment industry
is in for a big surprise if it thinks this changes anything. Indeed,
Mashboxx is rumored to be positioning itself to buy the assets of
Grokster. Hmmm...
About the author:
Richard A. Chapo is a San Diego business lawyer with
http://www.sandiegobusinesslawfirm.com - a San Diego business
law firm in San Diego, California.
