Using Products Liability Law for Guidance in the Grokster File-Sharing Scenario: Why the Sony Rule Should be Refined

Title:  Using Products Liability Law for Guidance in the Grokster File-Sharing Scenario:  Why the Sony Rule Should be Refined

Author:  Matthew R. Lindblom, Louis D. Brandeis School of Law, J.D. expected 2007

Journal:  Issue 1, Volume 45 of the Brandeis Law Journal

Reviewer: Sean Renfroe

In an age of ever-increasing technology, Matt Lindblom, in a soon to be published article, explores the realm of illegal downloading of music and video files off the Internet.  Lindblom first analyzes the traditional approaches utilized by the music and video industries in order to thwart Internet downloading.  Next, the author examines the two landmark Supreme Court cases—Sony Corp. of America v. Universal Studios, Inc. and Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., respectively—on the potential liability of the manufacturers that produce the file-sharing software.  This examination includes the potential flaws of both cases.  Finally, the article suggests that the Court, instead of looking to Patent law, must look to products liability law in order to determine the proper analysis for liability for the manufacturer of file-sharing devices.

As an initial matter, the author notes that the copyright owners, including the music and video industries, have traditionally pursued two separate avenues when seeking enforcement of a potential copyright violation.  The first avenue is to go directly after the individual copyright infringers.  While it has been effective with the prosecution of more than 6000 individuals, the author suggests this strategy may cost the music industry more than it benefits them, in terms of the literal economic loss in the prosecutions as well as the alienation of the music fan-base.  Additionally, the copyright holders have attempted to go indirectly after the manufacturers of the file-sharing devices that allow an individual copyright holder to download the illegal music or video.  One indirect method utilized by the copyright owners is to allege vicarious liability.  As such, a manufacturer is vicariously liable for the action of another if the manufacturer has control over the premises and does nothing to stop the infringement, and the manufacturer profits from the infringement.  In addition, the article explains the other indirect theory of liability—contributory infringement.  Under contributory infringement, a manufacturer is liable if he has the intent to induce direct infringement of another.

The article then examines the impact that Sony and Grokster have had on the indirect liability of manufacturers.  Initially, the author notes that the Court, in Sony, applied the contributory infringement theory of liability.  In Sony, the plaintiffs brought suit against Sony, alleging Sony had infringed on the plaintiff’s copyright by manufacturing a home video recorder, which had the ability record television programs.  After a detailed analysis of the case, the author notes that the defendant was not liable, as there were “substantial noninfringing uses for the home video recorders.”  As such, the Sony rule that emerges from the case is that a manufacturer will not be liable if the product is capable of being used for other noninfringing purposes.

Additionally, the author provides a detailed examination of the Grokster case.  In Grokster, the plaintiffs sued the designer of two file-sharing programs under a theory that the designer intentionally and knowingly created software that had the capabilities of infringing on their copyright.  The court, while concluding that the designer was in violation of copyright infringement, developed the “inducement rule.”  Under the “inducement rule,” a manufacturer of a product is liable if it takes a clear expression or affirmative step towards fostering infringement.  The author does note several flaws with the Grokster case.  One such flaw is that the Court never directly addressed the Sony decision and “side-stepped” an opportunity to clarify its holding in Sony. Additionally, the court noted that a manufacturer could not be held liable for contributory infringement based on the fact that the manufacturer failed to take affirmative steps to prevent copyright infringement.  As such, there is no affirmative duty on a manufacturer to develop filtering tools that would lessen a consumer’s ability to conduct infringing activity.

According to the author, the rules from Sony and Grokster will have little impact on copyright owner’s quest to protect its copyright.  Under both rules, a manufacturer is able to create a profitable file-sharing program “as long as the distributors do not market or take affirmative steps to induce their customer to infringe copyright.”  Consumers are now fully aware of file-sharing capabilities, so there is no longer a need to market a product.  Additionally, the author suggests that while attempting to balance new technology and the protection of the copyright, the Court, with its precedent from Sony and Grokster, has “disturbed the delicate balance” between the two competing interests.

Due the ineffectiveness of the Court’s decision in Sony and Grokster, the article suggests the Court should look to products liability law as a source for analyzing a potential copyright violation against a manufacturer.  According to the author, the Court has placed too much emphasis on protecting the manufacturer and little emphasis on the consumer—who products liability law is designed to protect.  The author proceeds to explore the numerous facets of products liability and how it may serve as guidance in copyright infringement cases.  The author initially examines the policy considerations for product liability cases, as well as asserts that the copyright owners are equivalent to the “foreseeable bystander” found in products liability laws.  In addition, the article argues that the file-sharing software is defective under a design defect.  Finally, the author analyzes possible defenses that could be used by the manufacturers; however, he concludes that the ultimate cost of the infringement should rest with the manufacturer.

Ultimately, the article states that the Courts or Congress are more suited to protect copyright holders.  Either one should redefine the Sony rule to reflect the development of this type of software, regardless of whether the manufacturer directly marketed to the consumers.  The manufacturers should be required to take precautions to make sure that its product is not utilized in a way to conduct illegal downloading.  While it is not possible to rid the market of illegal downloading completely, the author suggests that a redefined rule will limit the downloading, and hold those manufacturers accountable.

Reviewer Sean Renfroe is a classmate of the author at the Louis D. Brandeis School of Law, J.D. expected 2007.