EFF defended StreamCast Networks, the company behind the Morpheus (P2P) file-sharing software, in a case decided by the US Supreme Court on 06/23/05. Though the Court set aside the Ninth Circuit's ruling in favor of Streamcast, it also declined giving Hollywood what it truly wanted—a veto over technological innovation. Twenty-eight of the world's largest entertainment companies brought the lawsuit against the makers of the Morpheus, Grokster, and KaZaA software products, aiming to set a precedent to use against other technology companies (P2P and otherwise). The case raises a fundamental question at the border between copyright and innovation: When should the distributor of a multi-purpose tool be held liable for the infringements that may be committed by end-users of the tool? The Supreme Court's landmark decision in Sony v. Universal found that a distributor cannot be held liable for users' infringement so long as the tool is capable of substantial noninfringing uses. This standard has been precedent for more than 20 years. Relying on this, the Ninth Circuit ruled that the distributors of Grokster and Morpheus P2P file-sharing software cannot be held liable for users' copyright violations. The Supreme Court set aside the Ninth Circuit ruling, but it refused to overturn the Betamax doctrine or to force technology companies to redesign multipurpose technologies. But rather than clarify the rules, the Supreme Court instead punted on the hard questions by crafting a new doctrine of copyright infringement liability called "inducement." Innovators now have three uncertain copyright doctrines to worry about: inducement, contributory and vicarious.
This is MGM's first amended complaint for damages & injunctive relief for copyright infringement.
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