Advanced Copyright Issues on the Internet - Fenwick & West LLP

infringer, and that was a sufficient basis to affirm the grant of the preliminary injunction withoutreaching the vicarious liability issue. 1618(f)The StreamCast/Kazaa/Grokster LawsuitsThe facts of the case of StreamCast/Kazaa/Grokster lawsuits are set forth in SectionIII.C.2(c)(4) above. In that case, the court granted summary judgment to the defendantsStreamCast and Grokster on the plaintiff’s claim for vicarious liability. With respect to thefinancial benefit prong, the court ruled that both defendants derived a financial benefit from theinfringing conduct of the users of their software, since the ability to trade copyrighted songs andother copyrighted works acted as a “draw” for many users of the software. The defendants alsoderived substantial revenue from advertising displayed through the software. 1619With respect to the control prong, the court distinguished the Napster system, in whichcentralized search indices and mandatory registration system gave Napster both knowledge ofwhat was being exchanged and the ability to police those exchanges. By contrast, the courtfound no evidence before it that the defendants had the ability to supervise and control theinfringing conduct, all of which occurred after the product had passed to end-users. 1620The plaintiffs argued that the defendants’ software could have been altered to preventusers from sharing copyrighted files and the court should require such alterations, as the NinthCircuit required Napster to do. The plaintiffs noted that the defendants’ software alreadyincluded optional screens for pornographic/obscene file names and that it could just as easilyscreen out copyrighted song titles. The plaintiffs also argued that an effective “meta data” screencould be implemented, as well as emerging “digital fingerprinting” technology. 1621 In asignificant holding, the court rejected these arguments, stating that “whether these safeguards arepracticable is immaterial to this analysis, as the obligation to ‘police’ arises only where adefendant has the ‘right and ability’ to supervise the infringing conduct.” 1622 Unlike Napster,whose client software was an essential component of the integrated Napster system, thedefendants provided software that communicated across networks entirely outside defendants’control. 1623 “The doctrine of vicarious infringement does not contemplate liability based uponthe fact that a product could be made such that it is less susceptible to unlawful use, where nocontrol over the user of the product exists.” 1624 Accordingly, the court granted the defendantssummary judgment on the issue of vicarious liability.1618 Id. at 654-55.1619 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F. Supp. 2d 1029, 1043-44 (C.D. Cal. 2003).1620 Id. at 1044-45.1621 Id. at 1045.1622 Id. (emphasis in original).1623 Id.1624 Id. at 1045-46.- 354 -