Editing Grokster (section)

== Summary of the piracy argument ==
It has been estimated that 90% of files shared on Grokster were downloaded illegally.<ref>{{cite web | url = https://www.npr.org/templates/story/story.php?storyId=4565116 | title = Supreme Court Hears Copyright, File-Sharing Case | first = Nina | last = Totenberg | authorlink = Nina Totenberg | date = 29 March 2005 | work = [[NPR]]}}</ref> Whether such downloads have substantially affected the retail sales of music, videos, and other works protected by [[copyright]] and the [[intellectual property]] laws is a matter of debate.<ref>{{cite web | url = http://mason.gmu.edu/~atabarro/FileSharing.pdf | archiveurl = https://web.archive.org/web/20060226032035/http://mason.gmu.edu/~atabarro/FileSharing.pdf | archivedate = 26 February 2006 | title = The Effect of File Sharing on Record Sales: An Empirical Analysis | first1 = Felix | last1 = Oberholzer-Gee | authorlink1 = Felix Oberholzer-Gee | first2 = Koleman | last2 = Strumpf | date = December 2004 }}</ref> Grokster claimed they did not violate any copyright laws because no files passed through their computers.  They assigned certain user computers as "root supernodes" that acted as music hubs for their company.  Thus they were not responsible for controlling any specific file downloads.<ref>{{cite news | url = https://www.washingtonpost.com/wp-srv/technology/articles/groksterprimer_033805.htm | title = At a Glance: MGM v. Grokster | first = David | last = McGuire | date = 28 March 2005 | newspaper = [[The Washington Post]]}}</ref>

The key issue in the [[copyright infringement]] case was the so-called "Sony safe-harbor" principle that was set by the Supreme Court over 21 years previously in ''[[Sony Corp. of America v. Universal City Studios, Inc.|Sony v. Universal Studios]]'' 464 U.S. 417 (1984). The ruling stated that, "...the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial non-infringing uses" (Sony 464 U.S. at 442). This case challenged the legality of using VTRs to copy content using [[Betamax]] tapes.  Grokster argued that proof of reasonable, actual or potential, non-infringing use, is sufficient to fulfill the "substantiality" requirement. The RIAA and MPAA argued that Sony safe-harbor requires proof that the non-infringing use is the primary one; an incidental non-infringing use is not enough.

Among the ''[[amicus curiae]]'' briefs:

* The U.S. government proposed that a manufacturer of a technological device will be protected by Sony safe-harbor only if the non-infringing uses are commercially significant compared to the infringing uses.
* A group of law and economic professors (among them Professors Kenneth J. Arrow, and William M. Landes) argue that the test whether the non-infringing use is substantial, requires an examination of all the existing legal mechanisms for accomplishing the same task. The example given is the distribution of the Bible. This is lawfully available through [[peer-to-peer file sharing]] software and is therefore a non-infringing use. But many religious websites offer a free copy. Thus, since downloading the Bible through peer-to-peer file sharing software is an addition to the list of well-established legitimate methods for obtaining a free Bible, the benefits of this addition are not substantial and the overall use of P2P software should not be considered a non-infringing use.
* The cost-benefit analysis, first introduced by Judge Posner from the 7th Circuit Court of Appeals in the [[Aimster]] case, holds that a manufacturer of technological device will enjoy the Sony safe-harbor only if "...it would have been disproportionately costly for him to eliminate or at least reduce substantially the infringing uses."
* The [[Creative Commons]] organization presented a strong argument for non-infringing use in the form of the Creative Commons licence, despite the fact that the architecture of the software did not allow for the licence information to be transferred.{{clarify|date=June 2011|reason=Was it filtering metadata? Did the licenses require the full text to be transferred? Were no archives with multiple files allowed?}}
* Notable Emerging Technology Companies with the support of the [[Electronic Frontier Foundation]] (among them [[Kaleidescape|Kaleidescape, Inc.]] (CEO Michael Malcolm), Sling Media, Inc. (Founder Raghu Tarra), Time Trax Technologies Corp. (CEO Elliott Frutkin)  argued unwarranted alteration of the test set forth in Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984), that would have profound negative consequences for emerging technology companies. Determining a product’s "primary uses" necessarily requires evaluating how the product is actually used. This ''ex post facto'', or after-the-fact, test for contributory infringement would greatly increase the legal uncertainty surrounding the decision to pursue commercialization of a new technology. Emerging technology companies cannot necessarily predict the "primary uses" to which their new technology will be put, much less whether those uses would be held by the courts to be infringing uses.