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Property Law Keyed to Singer
Metro-Goldwyn-Mayer Studios Inc. (MGM) v. Grokster, Ltd.
ProfessorTodd Berman
CaseCast™ – "What you need to know"
Facts
Grokster, LTD and StreamCast Network distributed fee software that allowed the sharing of files in a peer to peer network. This avoided the need for central servers and costly server storage and works faster. Since files can go from computer to computer and not through the server it is safer and cost efficient. This program was used by universities, government agencies, corporations, libraries and then private users. Private users began sharing copyrighted music and video files without authorization. Grokster used technology called FastTrack and Stream Cast used Gnutella. The files shared do not go to a central location so Grokster and StreamCast did not know when the files were being copied but if they had searched there software they would see the type of files being shared. It was shown that StreamCast gave software called OpenNap labeled the best alternative to Napster in the hopes to take all the Napster users that had to stop using that software after Napster was sued. Grokster had a program called OpenNap that allowed users to search for Napster files. Grokster and StreamCast received revenues from posting advertising all over its program software. MGM was able to show that some 90 percent of the files being shared where copyrighted files. Also there is no evidence that either company tried to filter or stop copyright infringement. The district court granted summary judgment in favor of Grokster and Stream Case because although users of the software did infringe MGM’s property there was no proof there the distributors had actual knowledge of specific acts of infringement. MGM appealed.
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