Metro-Goldwyn-Mayer v. Grokster Ltd.
| Decision Date | 19 August 2004 |
| Docket Number | No. 03-56236.,No. 03-55901.,No. 03-55894.,03-55894.,03-55901.,03-56236. |
| Citation | 380 F.3d 1154 |
| Parties | METRO-GOLDWYN-MAYER STUDIOS, INC.; Columbia Pictures Industries, Inc.; Disney Enterprises, Inc.; Paramount Pictures Corporation; Twentieth Century Fox Film Corporation; Universal City Studios LLP, f/k/a Universal City Studios, Inc.; New Line Cinema Corporation; Time Warner Entertainment Company, LP; Atlantic Recording Corporation; Atlantic Rhino Ventures, Inc., d/b/a Rhino Entertainment, Inc.; Elektra Entertainment Group, Inc.; London-Sire Records, Inc., LP; Warner Brothers Records, Inc.; WEA International Inc.; Warner Music Latina, Inc., f/k/a WEA Latina, Inc.; Arista Records, Inc.; Bad Boy Records; Capitol Records, Inc.; Hollywood Records, Inc.; Interscope Records; Laface Records; Motown Record Company; RCA Records Label, a unit of BMG Music d/b/a BMG Entertainment; Sony Music Entertainment, Inc.; UMG Recordings, Inc.; Virgin Records America, Inc.; Walt Disney Records, a division of ABC, Inc.; Zomba Recording Corp., Plaintiffs-Appellants, v. GROKSTER LTD.; Streamcast Networks, Inc., f/k/a Musiccity.Com, Inc., Appellees, and Sharman Networks Limited; LEF Interactive PTY Ltd., Defendants. Jerry Leiber, individually d/b/a Jerry Leiber Music; Mike Stoller, individually and d/b/a Mike Stolller Music; Peer International Corporation, Peer Music Ltd., Songs of Peer Ltd.; Criterion Music Corporation; Famous Music Corporation, Bruin Music Company; Ensign Music Corporation; and Let's Talk Shop, Inc., d/b/a Beau-DI-O-DO Music, on behalf of themselves and all other similarly situated, Plaintiffs-Appellants, v. Consumer Empowerment BV, aka Fasttrack; Sharman Networks Limited; LEF Interactive PTY Ltd., Defendants, and Grokster Ltd.; Streamcast Networks, Inc., f/k/a Musiccity.Com, Inc., Defendants-Appellees. Metro-Goldwyn-Mayer Studios, Inc.; Columbia Pictures Industries, Inc.; Disney Enterprises, Inc.; Paramount Pictures Corporation; Twentieth Century Fox Film Corporation; Universal City Studios LLP, f/k/a Universal City Studios, Inc.; New Line Cinema Corporation; Time Warner Entertainment Company, LP; Atlantic Recording Corporation; Atlantic Rhino Ventures, Inc., d/b/a Rhino Entertainment, Inc.; Elektra Entertainment Group, Inc.; London-Sire Records, Inc., LP; Warner Brothers Records, Inc.; WEA International Inc.; Warner Music Latina, Inc., f/k/a WEA Latina, Inc.; Arista Records, Inc.; Bad Boy Records; Capitol Records, Inc.; Hollywood Records, Inc.; Interscope Records; Laface Records; Motown Record Company; RCA Records Label, a unit of BMG Music d/b/a BMG Entertainment; Sony Music Entertainment, Inc.; UMG Recordings, Inc.; Virgin Records America, Inc.; Walt Disney Records, a division of ABC, Inc.; Zomba Recording Corp., Plaintiffs-Appellants, v. Grokster Ltd.; Streamcast Networks, Inc., f/k/a Musiccity.Com, Inc., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Thomas G. Hentoff, David E. Kendall; Williams & Connolly; Washington, DC; for plaintiffs-appellants Metro-Goldwyn-Mayer Studios, Columbia Pictures Industries, Inc., Disney Enterprises, Inc., Paramount Pictures Corp., Twentieth Century Fox Film Corp., and Universal City Studios, LLP.
Robert M. Schwartz; O'Melveny & Myers, LLP; Los Angeles, CA, for Newline Cinema Corp., Time Warner Entertainment Co., Atlantic Recording Corp., Atlantic Rhino Ventures, Inc., Elektra Entertainment Group, Inc., London-Sire Records, Inc., LP, Warner Brothers Records, Inc., WEA International, Inc., Warner Music Latina, Inc., and Arista Records, Inc. Kelli L. Sager, Andrew J. Thomas, and Jeffrey H. Blum; Davis, Wright, Tremaine, LLP, Los Angeles, CA; Carey R. Ramos (argued); Aidan Synnott and Theodore K. Cheng, Paul, Weiss, Rifkind, Wharton & Garrison, LLP; New York, NY, for plaintiffs-appellants Jerry Leiber, Mike Stoller, Peer International Corp., Peer Music Ltd., Songs of Peer Ltd., Criterion Music Corp., Famous Music Corp., Bruin Music Co., Ensign Music Corp., and Let's Talk Shop, Inc.
Mark Lemley and Michael H. Page (argued); Keker & Van Nest; San Francisco, CA; Jennifer Stisa Granick; Stanford Law School; Stanford, CA, for defendant-appellee Grokster Ltd.
Cindy A. Cohn and Fred von Lohmann (argued); Electronic Frontier Foundation; San Francisco, CA; Charles S. Baker; Munsch, Hardt, Kopf & Harr, P.C.; Austin, TX, for defendant-appellee StreamCast Networks, Inc.
Hank L. Goldsmith; Proskauer, Rose LLP; Los Angeles, CA, for amici Bureau International des Societes Gerant Les Droits D'enregistrement et de Reproduction Mecanique, et al.
John M. Genga; Paul, Hastings, Janofsky & Walker LLP; Los Angeles, CA, for amici Law Professors and Treatise Authors Neil Boorstyn, Jay Dougherty, James Gibson, Robert Gorman, Hugh Hansen, Douglas Lichtman, Roger Milgrim, Arthur Miller, and Eric Schwartz.
Ian C. Ballon; Manatt, Phelps & Phillips, LLP; Los Angeles, CA, for amici American Film Marketing Association, et al.
Jeff G. Knowles; Coblentz, Patch, Duffy & Bass; San Francisco, CA, for amici American Federation of Musicians, et al.
Alan Malasky; Porter, Wright, Morris & Arthur, LLP; Washington, DC, for amicus National Ass'n of Recording Merchandisers, Inc.
Matthew S. Steinberg; Greenberg Traurig, LLP; Santa Monica, CA, for amici National Academy of Recording Arts & Sciences, Inc.
Jennifer M. Urban; Samuelson Law, Technology and Public Policy Clinic, University of California at Berkeley School of Law; Berkeley, CA, for amici 40 Intellectual Property and Technology Law Professors.
Jason M. Mahler; Washington, DC, for amicus Computer & Communications Industry Association, Netcoalition Industry Association.
Christopher A. Hansen; ACLU Foundation; New York, NY, for amici American Civil Liberties Union, et al. Roderick G. Dorman; Hennigan, Bennett & Dorman, LLP; Los Angeles, California, David B. Casselman, Wasserman, Comden, Casselman & Pearson, LLP, Los Angeles, CA, for amicus Sharman Networks Ltd.
Robert E. Kohn, Santa Monica, CA, for amici Consumer Electronics Association and Home Recording Rights Coalition.
Appeal from the United States District Court for the Central District of California; Stephen V. Wilson, District Judge, Presiding. D.C. Nos. CV-01-08541-SVW, CV-01-09923-SVW, CV-01-08541-SVW.
Before: BOOCHEVER, NOONAN, and THOMAS, Circuit Judges.
This appeal presents the question of whether distributors of peer-to-peer file-sharing computer networking software may be held contributorily or vicariously liable for copyright infringements by users. Under the circumstances presented by this case, we conclude that the defendants are not liable for contributory and vicarious copyright infringement and affirm the district court's partial grant of summary judgment.
From the advent of the player piano, every new means of reproducing sound has struck a dissonant chord with musical copyright owners, often resulting in federal litigation. This appeal is the latest reprise of that recurring conflict, and one of a continuing series of lawsuits between the recording industry and distributors of file-sharing computer software.
The plaintiffs in the consolidated cases ("Copyright Owners") are songwriters, music publishers, and motion picture studios who, by their own description, "own or control the vast majority of copyrighted motion pictures and sound recordings in the United States."1 Defendants Grokster Ltd. and StreamCast Networks, Inc. ("Software Distributors") are companies that freely distribute software that allows users to share computer files with each other, including digitized music and motion pictures. The Copyright Owners allege that over 90% of the files exchanged through use of the "peer-to-peer" file- sharing software offered by the Software Distributors involves copyrighted material, 70% of which is owned by the Copyright Owners. Thus, the Copyright Owners argue, the Software Distributors are liable for vicarious and contributory copyright infringement pursuant to 17 U.S.C. §§ 501-13 (2000), for which the Copyright Owners are entitled to monetary and injunctive relief. The district court granted the Software Distributors partial summary judgment as to liability arising from present activities and certified the resolved questions for appeal pursuant to Fed.R.Civ.P. 54(b). Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F.Supp.2d 1029 (C.D.Cal.2003) ("Grokster I").
To analyze the legal issues properly, a rudimentary under-standing of the peer-to-peer file-sharing software at issue is required — particularly because peer-to-peer file sharing differs from typical internet use. In a routine internet transaction, a user will connect via the internet with a website to obtain information or transact business. In computer terms, the personal computer used by the consumer is considered the "client" and the computer that hosts the web page is the "server." The client is obtaining information from a centralized source, namely the server.
In a peer-to-peer distribution network, the information available for access does not reside on a central server. No one computer contains all of the information that is available to all of the users. Rather, each computer makes information available to every other computer in the peer-to-peer network. In other words, in a peer-to-peer network, each computer is both a server and a client.
Because the information is decentralized in a peer-to-peer network, the software must provide some method of cataloguing the available information so...
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