Grokster Case Study
Nowadays, file sharing has become a controversial topic in media and entertainment industry. The use of file sharing software has significantly increased since the invention of P2P software known as Napster. The technology of Napster has changed the way people used the internet to share their mp3 files with each other easily which eventually led to copyright infringement. After the Napster case was settled, Grokster became the most popular P2P client software. In 2001, the music company led by Metro Goldwyn Mayer Studios (MGM) filed a suit against Grokster for contributing copyright infringement among its users. MGM complained that Grokster was acting illegally by intentionally distributed free software products that allowed internet users to share and download music and movies through P2P network. This circumstance resulted MGM to lose billions of dollars in revenue.
Grokster is a company that produced software and allowed internet users to share electronic files. However, The Grokster has learned from Napster’s mistake. Their software did not use centralized server which allowed users to connect directly with each other. Therefore, Grokster was not responsible for the operation of the program after users had downloaded the software on their computers. Grokster said that they did not have ability to control their users, and had no propose of knowing how their users were using the product for their own sake. They only made money by collecting software that served up advertisements with their product, but have no control what users did with it. In general, a copyright holder has two concepts of indirect liability available; vicarious and contributory liability. Vicarious liability allows a copyright holder to file a suit to an indirect contributor that has control over the direct infringer. For instance, Napster falls under this category because the product allowed users to share files which ran through internal servers that controls by...