The U.S. Supreme Court released a unanimous decision June 27 in the MGM Studios vs. Grokster case in favor of the entertainment industry, reversing the Ninth Circuit Court of Appeals opinion.

The U.S. Supreme Court released a unanimous decision June 27 in the MGM Studios vs. Grokster case in favor of the entertainment industry, reversing the Ninth Circuit Court of Appeals opinion.

The court held that developers of software violate federal copyright law when they provide computer users with the means to share unauthorized movie and music files from the Internet.

At issue in the case was whether Grokster and StreamCast, which operated -- and continue to operate -- the “decentralized” peer-to-peer file-sharing networks Grokster and Morpheus, respectively, should be secondarily liable for the copyright-infringing activities of their users who have shared millions of unauthorized music and movie files.

While the technology is capable of lawful use -- sharing files of public domain works and copyrighted works provided with the owners’ permission -- the evidence suggested that more than 90% of the copyrighted works on these networks were not authorized to be shared.

Before reaching the Supreme Court, the District Court and the Court of Appeals held that the defendants’ software was capable of lawful use. Also, the defendants did not know about specific infringing files at a time when they could exercise control over the decentralized networks. As a result, they could not be liable for users unlawfully sharing copyrighted works.

Responses from the parties are expected later today as the entertainment and technology industries digest the opinion.

The U.S. Supreme Court released a unanimous decision June 27 in the MGM Studios vs. Grokster case in favor of the entertainment industry, reversing the Ninth Circuit Court of Appeals opinion.


More Coverage:
* Read Billboard Legal Editor Susan Butler's case summary here.
* Tech companies respond.
* Independent labels voice varying reactions.
* International trade groups salute decision.
* Read early responses from trade groups, congressional leaders and other interested parties.
* Read the Syllabus of the opinion.
* Check back for updates on this story.