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Why Grokster Stands Where Napster Fell

By Samuel Fineman, Esq.

In a landmark decision issued on April 25, 2003, a federal district judge in Los Angeles rejected claims that two leading decentralized, peer-to-peer (P2P) networks were liable for copyright infringement. The court quashed the request of motion picture and recording industry associations, professional songwriters and music publishers to shut down the Grokster and StreamCast Networks, two companies that distribute free, P2P software allegedly used for the exchange of copyrighted music, movies and other digital media over the Internet. MGM Studios, Inc. v. Grokster, Ltd., No. 01-08541, slip op. (C.D. Cal. Apr. 25, 2003).

The music industry plaintiffs argued that Grokster and StreamCast were liable for both contributory and vicarious copyright infringement on the heels of another California federal district court's ruling that found Napster secondarily liable for copyright infringement by end-users of its file sharing software. See, A & M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001). The Grokster court sharply distinguished its facts from those of Napster, holding that Grokster and StreamCast, while operating in a manner “conceptually analogous” to Napster, were significantly different from Napster in their function, and thus were not secondarily liable for their end-users' copyright infringements.

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