Grokster - Rest In Peace
Grokster fought the law and the law won. Having lost in a
Supreme Court ruling, Grokster has shut down and settled with
the recording and movie industry.
Grokster - Rest In Peace
Facing up to a Supreme Court decision against them, Grokster has
settled with the music and movie industries. The company has
agreed to pay $50 million dollars in damages and terminate its
file file-sharing system. A visit to the Grokster site now shows
one page noting the ruling and the intention of the company to
come up with a legal alternative.
The decision of the Supreme Court in MGM v. Grokster was a
surprise too much of the legal community. Lower courts had
almost universally found in favor of Grokster using a theory
validated in the 1970s cases involving VCR machines. In those
cases, courts noted the makers of VCR machines could not be held
responsible for the actions of users. The crux of the argument
was the machine could be used for both legal and illegal
purposes, so liability could not be found.
In deciding against Grokster, a unanimous Supreme Court upheld
this legal theory. However, the Court noted Grokster had
actively promoted itself as a method for pursuing file sharing,
an act the Court found to constitute copyright infringement. As
such, the Court ruled that Grokster could be found liable for
copyright infringement. The decision effectively killed Grokster
as a business entity.
File Sharing Impact
Although Grokster bit the dust, much of the file-sharing
industry continues to function. Companies such as Morpheus
continue to do big business and fight the entertainment
industry. This is made possible by the Grokster decision, which
requires the entertainment industry to show intent to promote
copyright infringement on the part of companies such as Grokster
and Morpheus. Arguably, Grokster could start a new service
tomorrow and avoid problems so long as it didn't promote illegal
file sharing as a benefit of its service.
File sharing on the Internet is not dead. The entertainment
industry is in for a big surprise if it thinks this changes
anything. Indeed, Mashboxx is rumored to be positioning itself
to buy the assets of Grokster. Hmmm...