Grokster loses at Supreme Court on June 27
In METRO-GOLDWYN-MAYER STUDIOS INC., et al. v. GROKSTER, LTD., et al., 2005 U.S. LEXIS 5212, the decision of the 9th circuit at 380 F.3d 1154 was vacated and remanded.
Of Sony and the staple of commerce concept, the court noted:
On those facts, with no evidence of stated or indicated intent to
promote infringing uses, the only conceivable basis for imposing liability was on a theory of contributory infringement arising from its sale of VCRs to consumers with knowledge that some would use them to infringe. Id., at 439. But because the VCR was "capable of commercially significant noninfringing uses," we held
the manufacturer could not be faulted solely on the basis of its
distribution.
Id., at 442.
This analysis reflected patent law's traditional staple article of commerce doctrine, now codified, that distribution of a component of a patented
device
will not violate the patent if it is suitable for use in other ways. 35
U.S.C. ยง
271(c); Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476,
485
(1964) (noting codification of cases); id., at 486, n. 6 (same).
The
doctrine was devised to identify instances in which it may be presumed
from
distribution of an article in commerce that the distributor intended
the article
to be used to infringe another's patent, and so may justly be held
liable for
that infringement. "One who makes and sells articles which are only
adapted to
be used in a patented combination will be presumed to intend the
natural
consequences of his acts; he will be presumed to intend that they shall
be used
in the combination of the patent." New York Scaffolding Co. v. Whitney,
224 F.
452, 459 (CA8 1915); see also James Heekin Co. v. Baker, 138 F. 63, 66
(CA8
1905); Canda v. Michigan Malleable Iron Co., 124 F. 486, 489 (CA6
1903);
Thomson-Houston Electric Co. v. Ohio Brass Co., 80 F. 712, 720-721 (CA6
1897);
Red Jacket Mfg. Co. v. Davis, 82 F. 432, 439 (CA7 1897); Holly v.
Vergennes
Machine Co., 4 F. 74, 82 (CC Vt. 1880); Renwick v. Pond, 20 F. Cas.
536, 541
(No. 11,702) (CC SDNY 1872).
In sum, where an article is "good for nothing else" but
infringement,
Canda v. Michigan Malleable Iron Co., supra, at 489, there is no
legitimate
public interest in its unlicensed availability, and there is no
injustice in
presuming or imputing an intent to infringe, see Henry v. A. B. Dick
Co., 224
U.S. 1, 48 (1912), overruled on other grounds, Motion Picture Patents
Co. v.
Universal Film Mfg. Co., 243 U.S. 502 (1917). Conversely, the doctrine
absolves
the equivocal conduct of selling an item with substantial lawful as
well as
unlawful uses, and limits liability to instances of more acute fault
than the
mere understanding that some of one's products will be misused. It
leaves
breathing room for innovation and a vigorous commerce. See Sony Corp.
v.
Universal City Studios, supra, at 442; Dawson Chemical Co. v. Rohm &
Haas Co.,
448 U.S. 176, 221 (1980); Henry v. A. B. Dick Co., supra, at 48.
The parties and many of the amici in this case think the key to
resolving it
is the Sony rule and, in particular, what it means for a product to be
"capable
of commercially significant noninfringing uses." Sony Corp. v.
Universal
City Studios, supra, at 442. MGM advances the argument that granting
summary
judgment to Grokster and StreamCast as to their current activities gave
too much
weight to the value of innovative technology, and too little to the
copyrights
infringed by users of their software, given that 90% of works available
on one
of the networks was shown to be copyrighted. Assuming the remaining 10%
to be
its noninfringing use, MGM says this should not qualify as
"substantial," and
the Court should quantify Sony to the extent of holding that a product
used
"principally" for infringement does not qualify. See Brief for Motion
Picture
Studio and Recording Company Petitioners 31. As mentioned before,
Grokster and
StreamCast reply by citing evidence that their software can be used to
reproduce
public domain works, and they point to copyright holders who actually
encourage
copying. Even if infringement is the principal practice with their
software
today, they argue, the noninfringing uses are significant and will
grow.
We agree with MGM that the Court of Appeals misapplied Sony, which
it read as
limiting secondary liability quite beyond the circumstances to
which the
case applied. Sony barred secondary liability based on presuming or
imputing
intent to cause infringement solely from the design or distribution of
a product
capable of substantial lawful use, which the distributor knows is in
fact used
for infringement. The Ninth Circuit has read Sony's limitation to mean
that
whenever a product is capable of substantial lawful use, the producer
can never
be held contributorily liable for third parties' infringing use of it;
it read
the rule as being this broad, even when an actual purpose to cause
infringing
use is shown by evidence independent of design and distribution of the
product,
unless the distributors had "specific knowledge of infringement at a
time at
which they contributed to the infringement, and failed to act upon that
information." 380 F.3d at 1162 (internal quotation marks and
alterations
omitted). Because the Circuit found the StreamCast and Grokster
software capable
of substantial lawful use, it concluded on the basis of its reading of
Sony that
neither company could be held liable, since there was no showing that their software, being without any central server, afforded them knowledge of
specific unlawful uses.
***
Of a separate point on VCRs, one notes that they haven't died yet:
posted Dec. 27, 2005: would spending the money buying a used $50 SVHS deck and a TBC-1000 make more sense than spending $300 on either of these decks (for purposes of capturing 15-20 year old oxidized tapes made with a camcorder).
posted Dec. 18, 2005: I would make the same claim about my old JVC HR-S6800 and HR-S4900 VCRs.
There are many older VCRs that can provide superior capture quality to the JVC TBC/DNR VCRs. Ironically, these older units often close for bargain prices on EBay.
Think of an older VCR as an addition, not just an upgrade.
Sometimes the TBC/DNR system is very helpful.
Sometimes the capture quality of the older VCR is noticeably superior.
I think you'd be glad to have both.
Of Sony and the staple of commerce concept, the court noted:
On those facts, with no evidence of stated or indicated intent to
promote infringing uses, the only conceivable basis for imposing liability was on a theory of contributory infringement arising from its sale of VCRs to consumers with knowledge that some would use them to infringe. Id., at 439. But because the VCR was "capable of commercially significant noninfringing uses," we held
the manufacturer could not be faulted solely on the basis of its
distribution.
Id., at 442.
This analysis reflected patent law's traditional staple article of commerce doctrine, now codified, that distribution of a component of a patented
device
will not violate the patent if it is suitable for use in other ways. 35
U.S.C. ยง
271(c); Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476,
485
(1964) (noting codification of cases); id., at 486, n. 6 (same).
The
doctrine was devised to identify instances in which it may be presumed
from
distribution of an article in commerce that the distributor intended
the article
to be used to infringe another's patent, and so may justly be held
liable for
that infringement. "One who makes and sells articles which are only
adapted to
be used in a patented combination will be presumed to intend the
natural
consequences of his acts; he will be presumed to intend that they shall
be used
in the combination of the patent." New York Scaffolding Co. v. Whitney,
224 F.
452, 459 (CA8 1915); see also James Heekin Co. v. Baker, 138 F. 63, 66
(CA8
1905); Canda v. Michigan Malleable Iron Co., 124 F. 486, 489 (CA6
1903);
Thomson-Houston Electric Co. v. Ohio Brass Co., 80 F. 712, 720-721 (CA6
1897);
Red Jacket Mfg. Co. v. Davis, 82 F. 432, 439 (CA7 1897); Holly v.
Vergennes
Machine Co., 4 F. 74, 82 (CC Vt. 1880); Renwick v. Pond, 20 F. Cas.
536, 541
(No. 11,702) (CC SDNY 1872).
In sum, where an article is "good for nothing else" but
infringement,
Canda v. Michigan Malleable Iron Co., supra, at 489, there is no
legitimate
public interest in its unlicensed availability, and there is no
injustice in
presuming or imputing an intent to infringe, see Henry v. A. B. Dick
Co., 224
U.S. 1, 48 (1912), overruled on other grounds, Motion Picture Patents
Co. v.
Universal Film Mfg. Co., 243 U.S. 502 (1917). Conversely, the doctrine
absolves
the equivocal conduct of selling an item with substantial lawful as
well as
unlawful uses, and limits liability to instances of more acute fault
than the
mere understanding that some of one's products will be misused. It
leaves
breathing room for innovation and a vigorous commerce. See Sony Corp.
v.
Universal City Studios, supra, at 442; Dawson Chemical Co. v. Rohm &
Haas Co.,
448 U.S. 176, 221 (1980); Henry v. A. B. Dick Co., supra, at 48.
The parties and many of the amici in this case think the key to
resolving it
is the Sony rule and, in particular, what it means for a product to be
"capable
of commercially significant noninfringing uses." Sony Corp. v.
Universal
City Studios, supra, at 442. MGM advances the argument that granting
summary
judgment to Grokster and StreamCast as to their current activities gave
too much
weight to the value of innovative technology, and too little to the
copyrights
infringed by users of their software, given that 90% of works available
on one
of the networks was shown to be copyrighted. Assuming the remaining 10%
to be
its noninfringing use, MGM says this should not qualify as
"substantial," and
the Court should quantify Sony to the extent of holding that a product
used
"principally" for infringement does not qualify. See Brief for Motion
Picture
Studio and Recording Company Petitioners 31. As mentioned before,
Grokster and
StreamCast reply by citing evidence that their software can be used to
reproduce
public domain works, and they point to copyright holders who actually
encourage
copying. Even if infringement is the principal practice with their
software
today, they argue, the noninfringing uses are significant and will
grow.
We agree with MGM that the Court of Appeals misapplied Sony, which
it read as
limiting secondary liability quite beyond the circumstances to
which the
case applied. Sony barred secondary liability based on presuming or
imputing
intent to cause infringement solely from the design or distribution of
a product
capable of substantial lawful use, which the distributor knows is in
fact used
for infringement. The Ninth Circuit has read Sony's limitation to mean
that
whenever a product is capable of substantial lawful use, the producer
can never
be held contributorily liable for third parties' infringing use of it;
it read
the rule as being this broad, even when an actual purpose to cause
infringing
use is shown by evidence independent of design and distribution of the
product,
unless the distributors had "specific knowledge of infringement at a
time at
which they contributed to the infringement, and failed to act upon that
information." 380 F.3d at 1162 (internal quotation marks and
alterations
omitted). Because the Circuit found the StreamCast and Grokster
software capable
of substantial lawful use, it concluded on the basis of its reading of
Sony that
neither company could be held liable, since there was no showing that their software, being without any central server, afforded them knowledge of
specific unlawful uses.
***
Of a separate point on VCRs, one notes that they haven't died yet:
posted Dec. 27, 2005: would spending the money buying a used $50 SVHS deck and a TBC-1000 make more sense than spending $300 on either of these decks (for purposes of capturing 15-20 year old oxidized tapes made with a camcorder).
posted Dec. 18, 2005: I would make the same claim about my old JVC HR-S6800 and HR-S4900 VCRs.
There are many older VCRs that can provide superior capture quality to the JVC TBC/DNR VCRs. Ironically, these older units often close for bargain prices on EBay.
Think of an older VCR as an addition, not just an upgrade.
Sometimes the TBC/DNR system is very helpful.
Sometimes the capture quality of the older VCR is noticeably superior.
I think you'd be glad to have both.
posted by Lawrence B. Ebert at 7:23 PM
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