Understanding the Supreme Court Decision
The first step in understanding where the Grokster decision is headed is to understand what the decision is. The facts of the case are that MGM and several other hollywood movie studios brought suit against Grokster and StreamCast for vicarious and contributory copyright infringement. In brief, Grokster's p2p service, while capable of the substantial noninfringing issue of legal file sharing, is largely used to illegally share copyrighted material. The program was advertised to Napster users as an alternative sharing program during the time that Napster's case was being tried in court. None of the preceding facts are contested.
What MGM argues is that such advertisement shows evidence that Grokster intended to contribute to copyright violations, and expressed that intent through those advertisements.
Grokster defends by denying that intent, and cites that therefore they cannot be found guilty under the Sony rule. Further, their software does not allow them either to filter content or block specific users, and the design of their technology provides no way of knowing about infringing transfers until after they are complete.
The decision of the Supreme Court can largely be thought of as a procedural one. The district court granted summary judgment to Grokster on both the count of vicarious infringement and the count of contributory infringement, holding that the evidence at hand was not strong enough for any reasonable jury to find for MGM. The Ninth Circuit District Court of Appeals affirmed.
The Supreme Court reversed that summary judgment, stating that ultimately, there is enough evidence that summary judgment is not available. That is, a reasonable jury might find that Grokster's advertisements were specifically intended to capture a market of infringing users, thus making Grokster guilty by the standard of assertive inducement of copyright infringement.