Entertainment industry lawsuits against new technologies that enable the copying of copyrighted content date back to the 1980s, when the movie industry sought court
injunctions against the sale and use of
VCRs. In
Sony Corp. v. Universal City Studios in 1984
, the U.S. Supreme Court ruled that a technology manufacturer cannot be held liable for its users' copyright infringement if widespread unauthorized copying is unlikely, and if the technology enables significant non-infringing uses as well. The advent of
file sharing via the Internet in the late 1990s, and its enabling of easy and more widespread copying of copyrighted materials, inspired new arguments from the entertainment industry because copying technology had progressed since the 1980s. The
Sony precedent was partially modified by the
Ninth Circuit in
A&M Records v. Napster (2001), which addressed the ease of sharing music files online, and how the designers of the technology could be held liable for
contributory copyright infringement and
vicarious copyright infringement if such behavior was the primary use of the technology and the company benefited from it. Just a few years later, Internet technology had progressed to the point that trading large video files, including those for entire movies, had become viable via popular services including
Grokster. The
MGM v. Grokster case is frequently characterized as a re-examination of the issues in
Sony precedent, in light of rapidly progressing technologies and consumer behaviors. MGM and the other plaintiffs argued that makers of file sharing technology should held liable for their users' copyright infringement, via the contributory and vicarious infringement doctrines. On appeal, the
Ninth Circuit Court of Appeals upheld the district court's decision after acknowledging that peer-to-peer ("P2P") software has legitimate and legal uses. Computer and Internet technology companies such as
Intel, and trade associations including firms such as
Yahoo! and
Microsoft, filed
amicus curiae briefs in support of the file sharing companies, while the
RIAA and
MPAA both sided with MGM and the other entertainment companies.
Napster, having lost its
similar lawsuit about its enabling of users' copyright infringement, filed a brief in support of the entertainment companies. Billionaire
Mark Cuban partially financed Grokster's legal battle.
Oral arguments During
oral arguments, the Supreme Court justices appeared divided between the need to protect new technologies and the need to provide remedies against copyright infringement. Justice
Antonin Scalia expressed concern that inventors would be
chilled from entering the market by the threat of immediate lawsuits. Justice
David Souter questioned how the plaintiffs' interpretation of the law would affect devices like
copy machines or the
iPod. On the other hand, the justices seemed troubled at the prospect of ruling that Grokster's alleged business model of actively inducing infringement and then reaping the commercial benefits was shielded from liability. == Opinion of the Court ==