In this case the software company known as Grokster along with other companies distributed free software that allowed users to share files between their computers. The software was not intended for illegal downloading but users mainly used the software to download copyrighted files. The software companies knew that this illegal file-sharing was going on and they encouraged it through computer ads. A large group of entertainment companies headed by Metro-Goldwyn-Mayer Studios (MGM) sued Grokster and the other software companies for violation of the Copyright Act. They said that the software companies were intentionally distributing the software so that users could infringe works that had been copyrighted. The district court along with the Ninth Circuit court ruled in favor of Grokster and the software companies stating that the software could have been used lawfully therefore they were not liable for what users chose to do with it.

     Were the software companies liable for infringement? In my opinion they were liable. The fact that the software companies were encouraging consumers to continue to buy and use their product even though a great number of them were using the product for the wrong purpose makes them partially responsible for the user's actions. The encouragement by the companies was only a way for them to get more consumers and thus make more profit.

     The case went to the Supreme Court and they ruled in favor of MGM Studios and the entertainment companies that the software companies were liable for the infringement acts of their users. The court said that although the Copyright Act did not make someone liable for another's infringement, secondary liability applies. The fact that the software was so widely used makes it difficult to deal with each individual infringer therefore the secondary source, the software companies, must be liable.   

     This case shows a pretty advanced form of piracy in music software. The fact that the court system was able to use secondary source liability to persecute the software companies shows the attempts of the court system to keep up with the advancement of piracy in order to fight it.  

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.