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Impact of Grokster on colleges and universities

by Georgia Harper, Senior Attorney and Manager of the Intellectual Property System, Office of General Counsel, University of Texas

In June the Supreme Court handed down its unanimous decision in MGM Studios, Inc. v. Grokster, Ltd, vacating the Ninth Circuit’s opinion and remanding for a trial on the issues consistent with the Court’s opinion. One message in this decision is that Grokster and Streamcast will likely be found liable for contributory infringement based on inducing others to infringe. Their liability will as a practical matter put them out of business, at least as we now know them. While this may have an effect on the volume of illegal file sharing, it is not at all clear that it will put an end to it. Some are going to see in the opinion a roadmap for building the next generation of digital distribution software. Enforcement efforts will likely continue: copyright owners will continue to pursue p2p distributors, but with the new inducement cause of action. And they will probably continue to pursue individuals, especially if illegal file sharing simply goes further underground. Similarly, Universities must continue to actively educate our students and staff about copyright law and the consequences of infringing and respond quickly to allegations that those in our community are infringing.

But the more important aspect of the Grokster opinion is what it did not do. It did not dismantle the 1984 Sony precedent on the issue of secondary liability for distributing dual-use technologies.

As most readers know, Grokster and Streamcast produce peer-to-peer (p2p) software for locating and retrieving files that reside on the computers of other users of the software simultaneously connected to each other through the Internet. Using p2p software, ordinary people with only a personal computer are able to make their digital music collections available world-wide. The music and movie industries sued Grokster and Streamcast under theories of contributory and vicarious liability, to stop their distribution of this software. While such suits against Napster and Aimster, creators of predecessor types of p2p software, were successful, the 9th Circuit found that Grokster and Streamcast were different. Their software programs lacked a central index feature leaving Grokster and Streamcast uninvolved in the actual search and retrieval function performed by their users. As a result, they lacked the control needed for vicarious liability, and they didn't materially contribute to the infringements as required for contributory liability. Further, because their software had substantial noninfringing uses, based on the Sony precedent from 1984 (the case that gives us the right to time-shift television programming at home), their generalized knowledge that users infringe did not satisfy the other element required for contributory liability (the "staple article of commerce" exception to contributory liability).

By appealing the 9th Circuit's decision, MGM challenged the Sony precedent. MGM believed that we needed a new rule for the digital age, a rule that would not reward product development choices that seemed deliberately designed to avoid responsibility for the actions of third parties. Under MGM's proposals, one who intends to induce an infringement in a third party could not avail himself of the Sony "staple article of commerce" exception.

The Court gave MGM and the other petitioners what they wanted. Justice Souter wrote for the Court, though Justices Ginsburg and Breyer authored separate concurring opinions. Justice Souter’s opinion, borrowing from patent law as the Sony Court had done 20 years earlier, elaborated a new cause of action under which Grokster and Streamcast may be found liable for inducement to infringe; however, he was careful to leave untouched the landmark 1984 Sony opinion. Justice Souter’s opinion makes clear that companies like Grokster and Streamcast can be sued for inducing infringement where they distribute a device with the object of promoting its use to infringe copyright. Intent to induce infringement must be shown by clear expression or other affirmative steps. The Court gives examples of conduct that will quite probably result in a finding of inducement on remand.

Sony did not completely escape though. Justice Ginsburg, joined by Chief Justice Rehnquist and Justice Kennedy, encouraged the Ninth Circuit Court of Appeals to more strictly interpret Sony’s standard if it failed to find for MGM based on inducement on remand. Breyer, joined by Justices Stevens and O’Connor, strongly opposed any such modification or tightening up of the Sony standard. The point of contention involved what constitutes evidence on the issue of whether a dual-use technology is “capable of substantial noninfringing use.”  Ginsburg would not agree that the evidence shown in this case (affidavits that all together suggest at most 10% noninfringing uses) was sufficient under the Sony standard; Breyer felt it was.

These issues are very important to all colleges and universities, but especially to research institutions. The Sony standard establishes a secure environment for technological innovation. Any modification to the Court’s generous safe harbor for those who invent, manufacture and distribute technologies that can be used for both infringing and noninfringing uses may have had negative consequences for those who create new technologies and those who further develop and market them. Justice Breyer considers just such possibilities in his concurrence, concluding that Sony has worked well for us for 20 years and that MGM did not make a sufficient case for changing the standard. Fortunately, the opinion of the unanimous Court leaves Sony undisturbed, though the Ginsburg concurrence suggests at least some of the Justices are open to a reinterpretation of the Sony standard in the future. For now, at least, there does not appear to be an imminent threat to inventors and those who further develop and market their inventions capable of dual uses unless they actively encourage infringement. That will be the next debate: what, other than has occurred in this case, might constitute inducing infringement? We might expect the technology companies to ask Congress to help clarify that question, though they may wait to see how courts interpret the new Supreme Court decision before they do.

Google Print and Copyright Law

To read more on copyright by Georgia Harper, see Google This , a legal analysis of the Google Print Library Project by in Attorney Harper discusses the state of the fair use doctrine as it relates to the legal claims made against Google by authors and publishers.

Spotlight on new CUA employees

The Office of General Counsel recently interviewed Angela Ragan, Industrial Hygienist, and William Wood, Occupational Health and Safety Specialist from the CUA Office of Environmental Health and Safety, available online at http://ehs.cua.edu.

 OGC: Welcome to CUA, Angela and William. Can you tell us a bit about what you will be working on at CUA?

Angela: I will be performing typical industrial hygiene and bio-safety duties: indoor air quality investigations, laboratory inspections, asbestos and lead sampling, exposure monitoring, employee safety training, bio-safety committees and issues at CUA, ACS (Academic Safety Committee) and IACUC (Institutional Animal Care and Use Committee), to name a few.

William: Currently I will be handling hazardous materials/waste storage, removal, and paperwork to comply with all the applicable Federal and District laws.  I will also be working on a database designed to track and identify all of the confined spaces on campus to better inform Facilities Maintenance and outside contractors of their hazards.  Recently, I’ve have been performing monthly radiation surveys, testing all the chemical fume hoods, safety showers and eyewashes, and managing the calibration of all of the departments’ analytical equipment.

OGC: When did you decide upon an environmental field as the type of work you were interested in?

William: I have always enjoyed outdoor activities, such as surfing, hiking, and river sports to name a few.  I studied Environmental Science in college at Radford University in hopes of working in an environment that provides me with so much entertainment.

Angela: I decided upon the environmental field in high school while I was performing projects in Biology class.  I really liked the field of science with the theory and facts of it all.  I wanted to help preserve the environment and decided upon Environmental Science as my major with Geology as my minor in undergraduate school at Slippery Rock University of Pennsylvania.

OGC: Where did you work prior to coming to CUA?

Angela: I worked as a government contractor for NCI-Frederick working as an Industrial Hygienist.

William: I worked with chemical systems at Micron Technologies in Manassas, VA.

 OGC: There are a great many environmental regulations that affect your day-to-day work.  Can you tell us about some of the key regulations that affect your area of operations?

William: Some regulations that affect my day-to-day duties are the Resource Conservation and Recovery Act (RCRA) 40 CFR 262, the DC equivalent to RCRA (20 DCMR Subtitle E), and the Community Right to Know Act 40 CFR 370, to name just a few.

Angela: OSHA and EPA regulations, also ASHRAE (American Society of Heating, Refrigerating and Air-Conditioning Engineers which recommends levels for appropriate temperatures and comfort levels for indoor working environments).

OGC: What do you think will be the big environmental issues colleges and universities will face over the next five years?

Angela: Compliance and regulation of chemical use, storage and disposal of hazardous waste.  Also, getting laboratory workers to wear the appropriate PPE (Personal Protective Equipment i.e. gloves, safety glasses, etc).

William: I believe that universities will be held more accountable for their hazardous waste than they were previously because they’ll be treated more like businesses and other industries.

OGC:  Do you have any ideas about effective ways that your office can inform our clientele - faculty, students and staff – about important environmental laws that they need to be aware of and how would you do it for each group? 

Angela:  Every month EH&S includes a brief safety section in CUA This Week.

William:  Yes, I believe this is a good way to inform the University community about EH&S issues.  However, there is no better way to get information across to those who need it than in person.

OGC:  Are there ways that departments on campus could better assist you in carrying out your responsibilities for environmental health and safety and if so, what would they be?

Angela: By complying with recommendations that EH&S personnel make and in understanding that we are here to help protect all CUA employees and assist in providing a healthy and safe work environment for everyone.

William:  Everyone that I have met at the University has been extremely cooperative.  I have nothing but wonderful things to say about my experiences here at Catholic University.