The Supreme Court recently set a date for opening arguments in its review of MGM v. Grokster. Here is some additional background information on this case.

The Ninth Circuit’s Decision

In August 2004 a Federal Appeals Court upheld the controversial court decision that said file-sharing software programs such as Grokster or Morpheus are legal. Following the lead of a the federal district court, the 9th Circuit decided that peer-to-peer software developers were not liable for any copyright infringement committed by people using their products, as long as they had no direct ability to stop the acts.

The ruling means that companies that write and distribute peer-to-peer software can't be shut down because of the actions of their customers. It did not say file-trading itself is legal, and lower courts in the United States have said individual computer users are breaking the law when they trade copyrighted files without permission. But the ruling did lift the cloud of potential liability from defendants Grokster and StreamCast Networks, as well as from many of their rivals.


U.S. Supreme Court Review of the Ninth’s Circuit’s Decision

In early December 2004, The Supreme Court announced that it would review the Ninth Circuit’s decision. According to Billboard Magazine, the Supreme Court’s decision “will finally clarify the industry’s ability to control peer-to-peer technology through existing law.” Billboard also noted that “entertainment industry lawyers say” that the Court’s decision “will influence the industry at every level, including its ability to invest ion artists and songwriters…” (Billboard Magazine, December 25, 2004). Now, a firm date has been set for opening arguments.

Certain experts, however, argue that even if the Court were to reverse the Ninth Circuit, that the decision would not have a major impact. These experts argue that, in terms of P2P trading of songs, the train has already left the station. They point to off-shore P2P services that operate beyond the legal jurisdiction of U.S. law including certain countries, such as Canada, in which P2P is legal. They also contend that there are certain P2P systems that operate without any central control or owner. In other words, when it comes to these systems, there is no operator who could be sued. The only effective way of dealing with them, these experts argue, would be to force the ISPs to weed them out. But the content owners are not seeking that relief. It would violate the ISPs status as neutral carriers, and force them to censor content. Certain cynics also point out that the ISPs are too powerful for the content owner to challenge their legal immunity.