MGM V. Grokster Case Study

Whether it be games, movies, or music, you have most likely used P2P software at least once to download copyrighted material instead of paying for it. There are many applications that carry out the same task, for example Grokster, uTorrent, bitTorrent, or StreamCast Network. In 2005, a Supreme Court case emerged dealing with the issue of the copyright infringement liability faced by P2P companies. The Supreme Court ruled correctly in the MGM v. Grokster case that P2P file sharing companies are liable for copyright infringement because of the uses of P2P software, the knowledge and intention of P2P companies, and how it is different from the Betamax case years earlier.
P2P software has a wide variety of uses providing solutions to many different
Grokster and Streamcast both offered free software that carried out the same task, a P2P network for file sharing. As it turns out the majority of users were illegally sharing and downloading music, movies, and games. These companies even had knew of these actions by their users. During the investigation of the case “Grokster and StreamCast concede the infringement in most downloads” ("METRO-GOLDWYN-MAYER STUDIOS INC.”). What is worse is that they did absolutely nothing to stop this illegal use of their software as it would immensely decrease their user base. To argue their side of the case “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” (“Metro-Goldwyn-Mayer Studios Inc. (MGM)”). The fact that they knew about the illegal use of their software and did not take action against it is wrong. For example, they could have implemented a method of reporting copyrighted material so that Grokster could remove it. Many sites do this today, for instance SoundCloud. On every song there is an option to report for copyright infringement so that the creators of that music have their rights and assets protected from being
In court “judges became convinced that many p2p creators were fully aware that their software was being used primarily for copyright infringement and that software developers like Grokster were financially profiting from that infringement” (“Jamison”). This profit does not arise from a cost, as the program is provided to users for free. Instead, “Grokster and StreamCast received revenues from posting advertising all over its program software” (“Metro-Goldwyn-Mayer Studios Inc. (MGM)”). As it was free and there were only ads to worry about, users were not afraid to try and use Grokster software for personal use. The average person pays no mind to the ads as the hoster rakes in the