US - Supreme Court
 to Review Ninth Circuit
 Peer-to-Peer Decision

IRIS Legal Observations of the
European Audiovisual Observatory.
IRIS 2005-2:19/37

Edward Samuels

New York


[This is my short piece published in a European newsletter,

describing the granting of certiorari in the Supreme Court.

Click here to see the article at the IRIS website,

Or for French and German translations.]


            On December 10, 2004, the U. S. Supreme Court granted certiorari to review the Ninth Circuit’s holding, in MGM v. Grokster (see Iris 2004-8, p. 15), that the creators of peer-to-peer file sharing systems were not liable for copyright infringements by users of their systems.


            In the statement of the Question Presented, the plaintiffs/appellants cite what they describe as the “acknowledged conflict with the Seventh Circuit.” The Seventh Circuit, in In re Aimster Copyright Litigation, 334 F.3d 643 (June 30, 2003), held Aimster liable for copyright infringement for operating their peer-to-peer file sharing website. Reconciling the cases, however, is not as difficult as the appellants in Grokster imply. In the Aimster case, Judge Posner described five different types of uses (including the distribution of noncopyrighted works and the authorized distribution of copyrighted works) that might constitute the “substantial noninfringing uses” required under the Supreme Court’s reasoning in Sony v. Universal City Studios, 464 U.S. 417 (1984). Aimster, however, “failed to produce any evidence that its service has ever been used for a noninfringing use.”


            The defendants/appellees in Grokster apparently took the Aimster ruling to heart, submitting declarations by persons who used their system to distribute noncopyrighted or authorized works. Without quantifying the amount of such uses, the Ninth Circuit held that such uses were sufficient to constitute “substantial or commercially significant noninfringing uses.”


            Even though the cases can be reconciled, they do reflect different sensitivities to the claims of copyright owners and copyright users. In Aimster, while Judge Posner technically only required that legitimate noninfringing uses constitute more than zero percent, the tone of the case implies that even ten or twenty percent might not be enough. In Grokster, though the Ninth Circuit doesn’t say exactly how many uses constitute “substantial or commercially significant noninfringing use,” the implication is that as little as ten or twenty percent is enough.


            Many observers believe it is time for the Supreme Court to adopt a test of infringement better suited to the peer-to-peer environment than the 20-year old Sony ruling¾which was, after all, a 5-4 decision very much influenced by the particular setting of home videorecording of television programs broadcast for free over the public airwaves. Even if the Court ends up reaffirming Sony, it will have the opportunity to clarify or quantify precisely how much noninfringing use is required, or how decentralized a file sharing system must be in order to protect the operators of the system under Sony.


It is anticipated that the case will be argued in the spring, with a decision by June 2005.


· U.S. Supreme Court, 04-480, MGM Studios, Inc., et al. v. Grokster, Ltd., et al., Cert. Granted December 10, 2004

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