Final Grokster party loses fight.
StreamCast Networks has lost its fight against major record labels, music publishers and movie studios in the MGM Studios vs. Grokster case. The federal District Court in Los Angeles granted a summary judgment to the entertainment-industry parties today (Sept. 27), finding that the owners of the peer-to-peer network induced users to infringe copyrights.
"This is an especially gratifying marker in the continuing transformation of the online music marketplace," says Mitch Bainwol, RIAA chairman/CEO. "This court has spoken clearly, powerfully and persuasively to the principle that businesses based on theft will be held accountable. No single court ruling solves piracy or can make up for several challenging years for the music community, but there's no doubt that this particularly important decision means that the rules of the road for online music are better today than they were yesterday.
"When decisions like this one make clear that businesses based on theft won't be accepted, the winners are the music industry, who can invest more in bringing great music to the public, and fans who will have access to a wider array of exciting legal options."
The decision follows the June 2005 U.S. Supreme Court decision in the case. At that time the court unanimously held that a company could be liable for secondary infringement of copyright if it "induced" other parties to infringe. Since then, Grokster settled with the entertainment-industry parties. StreamCast continued its fight as the case was sent back to the District Court to review evidence of inducement.
In a 60-page opinion, the court wrote that StreamCast's software was used "overwhelmingly" for infringement. The company ensured that its technology had infringing capabilities, and its business model depended on massive infringement.
The entertainment-industry parties will have the opportunity to present evidence for an award of damages at a later date. While StreamCast may legally appeal the decision, the U.S. Supreme Court decision previously suggested that StreamCast should be found liable.