This article looks at newly emerging technology that is currently being effected by the MGM v. Grokster decision. Ganley provides a standard background of the Grokster case, stating the facts of the proceedings, before delving into the ramifications of the unanimous decision that “distributors of decentralized P2P software can be held liable for copyright infringements committed by their users.” Some people felt that the “key to resolving the case was an affirmation or reinterpretation of the Sony rule,” but Ganley writes that the Supreme Court disagreed with this notion and instead focused on the issue of intent, which was mention in the Sony case, but not the main focus of that decision. Specifically, the court stated that “nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from the common law.”

Overall, the court used three main pieces of evidence to prove that there was intent on the part of Grokster and Streamcast, thus enacting the inducement standard. The three points were 1) Advertising – meaning the way Grokster presented its service to clients – 2) Absence of Filtering – meaning the lack of precaution against the potential for infringing activity – and 3) Revenue model – meaning the way revenue was collected. In this case, the amount of money generated directly correlated to the number of people using the service and the traffic on the site was almost entirely due to infringing behavior, which meant that regardless of the system’s non-infringing potential uses only the infringing uses were directly generating revenue. The court also pointed out in their holding that points 2 and 3 “simply added weight to inference of an unlawful intent based on the advertising-related behavior. On their own, these points would not satisfy the evidential burden.”

About these three points, Ganley comments that the one dealing with filtering seems to be the most problematic. The reason for his saying this is because future innovation could be chilled. Even though the lack of a filtering system alone was not enough to prove inducement, the decisions of future cases may hinge on whether of not a filtering mechanism was present in the device or system. However, these sorts of mechanisms may be too expensive for independent inventors to incorporate in early stages of development and therefore hinder future inventions. Ganley also touches briefly on the inducement standards possible effect on BitTorrent and Me2Me technology such as Tivo, the iPod or the Slingbox. So far, BitTorrent seems to be in the clear because all expression of its intent encourages non-infringing uses, unlike Grokster’s internal communication that specifically hoped to target old Napster users. Additionally, Me2Me technology has not get been formally prosecuted because thus far they are not guilty of inducement or the Sony standards of contributory infringement and vicarious liability. Of course, they may still be brought to court in the future.

In conclusion, Ganley writes that the Grokster decision is unlikely to make much of a difference to files shared online and has only caused minimal damage to future technological advances. But, as a result of the case's outcome, harsher infringement protection is being created. There is new technology coming to the market like programs called Avalanche or SnoCap that are using cutting-edge technology to digitally fingerprint copyrighted material and hopefully protect them from being illegally distributed in the future.

As Alfred Yen, professor of law at the Boston College Law School, states in his introduction, this article "studies the construction of third party copyright liability in light of the recent Supreme Court case Metro-Goldwyn-Mayer Inc. v Grokster, Ltd.” The article is broken up into five sections: the first describes the doctrines that governed third party liability before Grokster, the second uses “fault and strict liability to expose the theoretical and practical tradeoffs implicit I these differing constructions, the third analyzes the case itself, the fourth describes the implications of the decision and “sets forth the general contours of an improved, post-Grokster­ construction of third party copyright liability, and the fifth gives some thought to the future of this subject matter.

The Grokster case is the latest in a series of cases where an internet service provider has been prosecuted for the actions of its users. Yet, even with this new decision in the books, little progress has been made to determine who is really the most responsible for infringement or how to hold them adequately responsible. Yen writes that “third part copyright liability benefits society by encouraging individuals to stop others from infringing, but those benefits come at a price… third party copyright liability suppresses non-infringing as well as infringing behavior.” Overall, this paradox illustrates the biggest deficit of internet copyright law: the inability to find the balance between, in Yen’s words, “desirable and undesirable consequences” of new technology. At this point in time, there seems to be no obvious strategy for regulating the internet without stifling future innovation and creation.

This article points out that although Grokster “gave the Supreme Court the opportunity to straighten out the law of third party copyright liability” little to no progress was actually made in interpreting pre-Grokster doctrines of third party copyright liability. Instead of “choosing between” existing “differing interpretations” of the law, Yen writes that the court “adopted a dormant theory of third party copyright liability, inducement.” Overall, Yen’s article shows that “inducement give courts a new tool for holding culpable defendants liable which reducing the risk of undesirable side effects.” Yen describes the Grokster decision as being “not a landmark, so much as a milestone, ratifying a continuing détente between those who build on the Internet and those in a position to regulate the builders.” This decision has also turned the focus of internet gate keeping to controlling software and PC uses ability to run that software rather than the ability to control the entire network.

Whether or not one agrees with the merit of the new inducement doctrine, this article is a comprehensive look at an area of copyright law that is important and continuing to quickly evolve. The story of these laws will continue to change drastically in the years to come, but this is a useful, informative and through-provoking look at the situation thus far.

In this article, William Landes looks at the “enduring legal question” that asks to what extent tools, services and venues that individuals use to infringe copyright should be held liable for the resulting infringement. In other words, Landes asks “how far should copyright liability extend beyond any direct lawbreakers?” Copyright law uses a variety of common law doctrines and statutory provisions in order to address issues of secondary and tertiary liability. In this article, Landes looks at these laws of copyright and evaluates them from an economic perspective. Landes states that unlike the Patent Act, the Copyright Act of 1976 “does not explicitly recognize the possibility of indirect liability.” He writes that courts have held third parties liable for copyright infringement by turning to the long-standing common law doctrines of contributory infringement and vicarious liability. Landes goes into a great deal of detail in explaining what these two terms actually mean and explaining their role in the Sony decision.

Landes claims that in the Sony decision the Courts failed to consider the balance between the benefits associated with legitimate use and the harms associated with illegitimate use. Landes writes that the ruling “implies that VCR manufacturers can facilitate any copyright violation they wish so long as they can prove that VCRs also facilitate some non-trivial amount of legitimate behavior.” However, Landes concedes that “mere dissection of the legal analysis misses the heart of the Sony decision” and goes on to write that “the driving concern in Sony was a fear that indirect liability would have given copyright holders control over what was then a new and still-developing technology.” Overall, the Court wrote that Copyright law must “strike a balance between a copyright holder’s legitimate demand for effective . . . protection . . . and the rights of others freely to engage in substantially unrelated areas of commerce.” This same idea can be analogized to a lawsuit that attempts to hold Internet service providers liable for online copyright infringement. Landes writes that “it is easy to see why courts would be reluctant to enforce such liability.”

From an economic standpoint, Landes explains that although Copyright law is important “at some point copyright incentives must take a backseat to other societal interests, including an interest in promoting the development of new technologies and an interest in experimenting with new business opportunities and market structures.” Overall Landes concludes that “the main argument in favor of liability is that, although [secondary] parties are only indirectly responsible, they are typically in a good position to either prevent copyright infringement or pay for the harm it causes.” However, “indirect liability has a significant drawback […] in that legal liability — even if carefully tailored — inevitably interferes with the legitimate use of implicated tools, services, and venues. Sometimes raising the prices of services, or even just setting the prices of in the first place, dissuades legitimate users from engaging in legal activity because they don’t want to pay the price. Landes points out that “one can only wonder, for example, how different the Internet would look today had it been clear from that outset that, say, Internet service providers were going to be held accountable for online copyright violations.” Landes concludes by saying that “ the only way to determine the proper scope for indirect liability is to weigh its costs and benefits against the costs and benefits associated with other plausible mechanisms for rewarding authors.”