Grokster: Supremes Not Hot on P2P Lawsuits

WASHINGTON — After round one in the MGM vs. Grokster case before the U.S. Supreme Court, peer-to-peer software companies seem to be ahead on several justice’s scorecards.

At the heart of the case is whether P2P companies should be held liable for revenue entertainment companies claim they are losing due to illegal sharing of copyrighted material by end users.

During animated discussions, several justices voiced concerns that the threat of legal action against software companies could severely impede innovation.

Justice Antonin Scalia said he feared allowing entertainment companies to sue technology makers would lead to a mindset that, “[If] I’m a new inventor, I’m going to get sued right away before I get a chance to do business.”

The Grokster case dates back to 2001, when entertainment companies, including the Recording Industry Association of America and the Motion Picture Association of America, filed suit against Grokster and fellow P2P software maker Morpheus, arguing that companies that produce products that are primarily used for illegal piracy should be held responsible for the actions of their users.

The defendants have maintained that their products also have, and are intended for, legal uses, and that they should not, therefore, be held liable when consumers choose to use their products in unlawful ways.

So far, the P2P companies have won victories in both U.S. District Court and the 9th U.S. Circuit Court of Appeals, and they seem to have won over Justice Breyer, who noted during the discussion that P2P technology offers “some really excellent” non-infringing uses.

Donald Verrilli, an attorney representing the entertainment industry, fired back that of 2.6 billion files traded over P2P networks each month, only a few hundred thousand are legal.

“That’s the whole business,” Verrilli said. “What they’re talking about as lawful is a tiny, teeny little fraction.”

Justice Stephen G. Breyer questioned whether an open door policy on litigation against innovators whose technology has potentially illegal uses would have stifled development of copy machines, VCRs and even the printing press.

Justice David Souter noted that the Apple iPod falls into the same category and how any inventor or developer, given the threat of legal action, could approach the market with confidence.

However, not all justices fell on the side of P2P. Justice Anthony M. Kennedy, for one, worried that software companies are being allowed to build businesses and reap massive profits from what is, in essence, stealing.

“That seems wrong to me,” he said.

A decision is not expected until mid Summer.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

Roxie Rae Relaunches Site Through XSiteAbility

Roxie Rae has relaunched her site through XSiteAbility.

Federal Appeals Court Vacates FTC 'Click to Cancel' Rule Pending Review

The U.S. Court of Appeals for the 8th Circuit on Tuesday vacated the Federal Trade Commission’s “click-to-cancel” rule aimed at making it easier for consumers to cancel online subscriptions, pending further review.

NYC Adult Stores Lose Challenge to Zoning Law, May Face Relocation

The U.S. Court of Appeals for the 2nd Circuit on Tuesday upheld a lower court’s decision to allow enforcement of a 2001 zoning law aimed at forcing adult retail stores out of most parts of New York City.

FSC Drops Florida AV Lawsuit in Wake of SCOTUS Decision

A U.S. district court judge granted on Tuesday a motion by Free Speech Coalition to dismiss the trade association’s lawsuit over Florida’s age verification law, a case that had been on hold pending the Supreme Court’s recent ruling on the constitutionality of state AV laws.

Ukrainian President Responds to Porn Legalization Petition

President Volodymyr Zelensky responded Tuesday to an OnlyFans model’s petition to decriminalize pornography in Ukraine, stating that he would wait for the legislative process to play out “in accordance with established procedure.”

Only Tax Deductions Joins Pineapple Support as Sponsor

Adult industry accounting firm Only Tax Deductions has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

Adult Empire Launches 'Conversations' Podcast Series

Adult Empire has launched a new official podcast series hosted by Nicole Chappelle and Charlie.

Sex Work CEO Launches 'Teams Plan' for AI Assistant

Sex Work CEO has introduced the new Teams Plan for its AI-powered, NSFW text generator, GPTease.

2025 XBIZ Amsterdam Website Launches With Call for Speakers

XBIZ is pleased to announce that the website for its annual European conference, XBIZ Amsterdam, is now live.

NC Governor Vetoes Bill Targeting Adult Industry, Override Possible

North Carolina Governor Josh Stein today vetoed a bill imposing new regulations that adult industry observers have warned could push adult websites and platforms to ban most adult creators and content.

Show More