Lawsuits Against File Sharing Networks
Peer-to-peer file sharing networks like Napster and Grokster became tremendously popular and were widely used to share music. While record companies and some artists saw these networks as tools for copyright infringement, others used them to sell their songs. These networks worked by allowing individuals who downloaded peer-to-peer software to connect their computers directly to others who had done the same. As a result, these individuals could share none, some or all of the files on each others’ computer hard drives. The technology used by the two networks — Napster and Grokster was slightly different. Napster maintained servers containing an index of music files available on the system. Grokster maintained no such centralized index.
The major record labels filed separate lawsuits against Napster and Grokster accusing these networks of allowing their consumers to illegally share copyrighted music. Both lawsuits tested the well-established principle of copyright law that an equipment manufacturer is not liable for copyright infringements of its consumers if the technology it provides is “merely capable of substantial non-infringing uses”. The Supreme Court enunciated this principle in its landmark fair use decision, in Sony Corp. of America v. Universal City Studios. In that case the court held that using a VCR to record television programs to watch them later was fair use.
Yet in both the Napster and Grokster cases, courts held the equipment manufacturers, i.e. the suppliers of the software liable for their customer’s infringements. In the Napster case, the court said that Napster had actual knowledge of infringement and had a duty to police its servers. In the Grokster case, the court found that Grokster had taken “active steps to encourage infringement”. The court saw Grokster’s advertisements targeted at former Napster users, newsletters discussing uses of the Grokster software, and Grokster’s response to customer queries about how to use the software as evidence of these “active steps to encourage infringement”.
In both cases, the courts side stepped the issue of the technology being capable of substantial non-infringing uses. As a result of these decisions, both the Napster and Grokster services went out of business. However, even in the wake of these decisions, other P2P services continue to flourish.
