StreamCast is Cast As Inducer, Based on Lots of Inadequate Proofs.

Another coffin nail was driven into the P2P corpus by the summary judgment of copyright infringement granted to the entertainment industry in MGM v. Grokster (StreamCast), 2:01CV8541 (27 Sept. 2006).  While I am open-minded about the result reached, I continue to question a summary judgment based on inferential evidence of intent to induce.  Also, I may be missing it, but there’s no treatment of the countervailing question of the “need to keep from trenching on regular commerce or discouraging the development of technologies with lawful and unlawful potential.”  Grokster, 545 U.S. 913.

The ruling on remand essentially expands upon the summary of proofs in the record considered by the Supreme Court.  In the category of copyright infringers always lose, the District Court concluded that each category of the evidence was standing “alone insufficient to support liability,” but when “viewed in context with other [insufficient] evidence” was enough to sustain an “inference of” intent to induce infringement.  That’s like a ‘smell’ test, and IMO not the Rule 56 threshold set out in Liberty Lobby, especially on a disputed issue of intent.

The District Court honed in on the fact that StreamCast opened their doors to former Napster users, and ‘everyone knew’ that Napster enabled infringing uses.  It highlighted evidence that StreamCast users engaged in infringing sharing of music, which the defendants “must” have known about.  It did not implement filters or measures to limit or prevent infringing uses, and it offered technical support and upgrades.  Again, none of these categories of proof “alone” was sufficient to impose liability.  The Supreme Court noted set those limits in its Grokster ruling.  A “mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability.”  The evidence must go “beyond a product’s characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement.”  The “ordinary acts incident to product distribution, such as offering customers technical support or product updates, [cannot] support liability in themselves.”  Again, the rule of the road is, copyright infringers lose.  Even if no set of proof will support liability, then that support comes from a sum of the inadequacies.

The point given less mention is whether StreamCast is “capable” of significant, non-infringing use.  That capability is proven, not by assessing the actual use.  The Supreme Court described “staple-article rule” from the Sony v. Betamax case as what balances the goals of stopping infringement and permitting innovation.  When I first read that, I presumed that on remand, and if the case went to trial, that StreamCast might have a defense, or be able to rebut the inference of intent.  They would get to ask a California jury whether the inferred intent outweighed the need to promote innovation.  Do you ladies and gentlemen of the jury find that the culpable intent imputed from the evidence is adequate to overcome that “need to keep from trenching on regular commerce or discouraging the development of technologies with lawful and unlawful potential.”