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Summary Lecture 5
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Lecture of the LL.M. Master course Global E-commerce and Internet Liability
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Lecture 5 - Grokster caseIn a client-server model, a client wants to see a website so he sends a request to the server and the
server sends the webpage back. There are two different computers, the client and the server.
In a peer2peer network, all computers in the networks are peers, they are equal. They all have
information that is made available to others, but they can also function as a browser at the same
time. If music is being shared, a piece of the music is at one peer and another piece at another peer.
The pieces of music are collected and sent to the person who wants to listen to it. In order to create
it, you need P2P software so there is an actor for doing so. Distribution of software is a very light
form of intermediary activity because everyone who wants to be part of the network downloads the
software and the distributor has nothing to do with what the downloader does with it.
In the older P2P networks, there was a central facility. It was a sort of index that keeps track of where
the different pieces are.
Napster was the older type of P2P network. These networks were used for sharing music and movies
illegally. Court case against Napster where it was liable since Napster was in control over the central
index. If you have control over the index, you can prevent that people download it illegally since you
can remove the entry from the index so the P2P network won’t work anymore for that music. They
could do something so you should do something: the court said they’re liable.
The void was filled by Grokster, also a peer2peer network and they looked at what went wrong with
Napster: the central index. They deleted the central part of it and the index function was distributed
this over the peers, so everyone had a small index function. The only central thing that remained was
the distribution of the software itself. The case evolved around the question whether these people
knowingly and willingly distributed this software to enable users to infringe copyright.
The standard questions that the court goes through: damage, wrongdoer, conduct (distributed
software while they knew it would be used for copyright infringement although they didn’t know the
exact works that were being shared, they had a general knowledge about it), causation, ground of
accountability was indirect infringement. No direct infringement because Grokster didn’t store any
copyrighted work, they only distributed software that they wrote themselves.
It’s a lot of work to go after individual users since they are so many so you go after the intermediary.
Also, because it is a widely-used software to infringe copyright. If you give intermediaries more a free
hand you have more technological innovation but the copyright industry is less protected and the
other way around.
Grokster advertised itself as being a replacement of Napster, they did nothing to monitor or limit
infringement and there were all kinds of advertisements where you could download the software so
they received a lot of advertisement revenue.
The court went to see if there is contributory or vicarious liability. For contributory liability, a direct
infringement by another party is needed and the contributory liable party must know this and he has
materially contributed. For vicarious liability, there must be a third party who commits direct
infringement, benefit and a duty to supervise. The court held that they didn’t have knowledge over
the illegal content, so knowledge was lacking and therefore contributory liability could no longer be
established. There was no real duty to check for copyright infringement, so vicarious liability didn’t
work either. The Supreme Court said they didn’t think that was okay, so they introduced the so-
called inducement theory which was based on the three circumstances that they found in this case.
They were a replacement of Napster (if you want to infringe copyright come to us), they earned
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