Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.

(Slip Opinion) OCTOBER TERM, 2004 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

METRO-GOLDWYN-MAYER STUDIOS INC. ET AL. v.

GROKSTER, LTD., ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

No. 04–480. Argued March 29, 2005—Decided June 27, 2005

Respondent companies distribute free software that allows computer

users to share electronic files through peer-to-peer networks, so

called because the computers communicate directly with each other,

not through central servers. Although such networks can be used to

share any type of digital file, recipients of respondents’ software have

mostly used them to share copyrighted music and video files without

authorization. Seeking damages and an injunction, a group of movie

studios and other copyright holders (hereinafter MGM) sued respon-

dents for their users’ copyright infringements, alleging that respon-

dents knowingly and intentionally distributed their software to en-

able users to infringe copyrighted works in violation of the Copyright

Act.

Discovery revealed that billions of files are shared across peer-to-

peer networks each month. Respondents are aware that users em-

ploy their software primarily to download copyrighted files, although

the decentralized networks do not reveal which files are copied, and

when. Respondents have sometimes learned about the infringement

directly when users have e-mailed questions regarding copyrighted

works, and respondents have replied with guidance. Respondents

are not merely passive recipients of information about infringement.

The record is replete with evidence that when they began to distrib-

ute their free software, each of them clearly voiced the objective that

recipients use the software to download copyrighted works and took

active steps to encourage infringement. After the notorious file-

sharing service, Napster, was sued by copyright holders for facilitat-

ing copyright infringement, both respondents promoted and mar-

keted themselves as Napster alternatives. They receive no revenue

2 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

Syllabus

from users, but, instead, generate income by selling advertising

space, then streaming the advertising to their users. As the number

of users increases, advertising opportunities are worth more. There

is no evidence that either respondent made an effort to filter copy-

righted material from users’ downloads or otherwise to impede the

sharing of copyrighted files.

While acknowledging that respondents’ users had directly in-

fringed MGM’s copyrights, the District Court nonetheless granted re-

spondents summary judgment as to liability arising from distribution

of their software. The Ninth Circuit affirmed. It read Sony Corp. of

America v. Universal City Studios, Inc., 464 U. S. 417, as holding that

the distribution of a commercial product capable of substantial nonin-

fringing uses could not give rise to contributory liability for infringe-

ment unless the distributor had actual knowledge of specific in-

stances of infringement and failed to act on that knowledge. Because

the appeals court found respondents’ software to be capable of sub-

stantial noninfringing uses and because respondents had no actual

knowledge of infringement owing to the software’s decentralized ar-

chitecture, the court held that they were not liable. It also held that

they did not materially contribute to their users’ infringement be-

cause the users themselves searched for, retrieved, and stored the in-

fringing files, with no involvement by respondents beyond providing

the software in the first place. Finally, the court held that respon-

dents could not be held liable under a vicarious infringement theory

because they did not monitor or control the software’s use, had no

agreed-upon right or current ability to supervise its use, and had no

independent duty to police infringement.

Held: One who distributes a device with the object of promoting its use

to infringe copyright, as shown by clear expression or other affirma-

tive steps taken to foster infringement, going beyond mere distribu-

tion with knowledge of third-party action, is liable for the resulting

acts of infringement by third parties using the device, regardless of

the device’s lawful uses. Pp. 10–24.

(a) The tension between the competing values of supporting crea-

tivity through copyright protection and promoting technological inno-

vation by limiting infringement liability is the subject of this case.

Despite offsetting considerations, the argument for imposing indirect

liability here is powerful, given the number of infringing downloads

that occur daily using respondents’ software. When a widely shared

product is used to commit infringement, it may be impossible to en-

force rights in the protected work effectively against all direct in-

fringers, so that the only practical alternative is to go against the de-

vice’s distributor for secondary liability on a theory of contributory or

vicarious infringement. One infringes contributorily by intentionally

Cite as: 545 U. S. ____ (2005) 3

Syllabus

inducing or encouraging direct infringement, and infringes vicari-

ously by profiting from direct infringement while declining to exercise

the right to stop or limit it. Although “[t]he Copyright Act does not

expressly render anyone liable for [another’s] infringement,” Sony,

464 U. S., at 434, these secondary liability doctrines emerged from

common law principles and are well established in the law, e.g., id.,

at 486. Pp. 10–13.

(b) Sony addressed a claim that secondary liability for infringement

can arise from the very distribution of a commercial product. There,

copyright holders sued Sony, the manufacturer of videocassette re-

corders, claiming that it was contributorily liable for the infringe-

ment that occurred when VCR owners taped copyrighted programs.

The evidence showed that the VCR’s principal use was “time-

shifting,” i.e., taping a program for later viewing at a more conven-

ient time, which the Court found to be a fair, noninfringing use. 464

U. S., at 423–424. Moreover, there was no evidence that Sony had

desired to bring about taping in violation of copyright or taken active

steps to increase its profits from unlawful taping. Id., at 438. On

those facts, the only conceivable basis for liability was on a theory of

contributory infringement through distribution of a product. Id., at

439. Because the VCR was “capable of commercially significant non-

infringing uses,” the Court held that Sony was not liable. Id., at 442.

This theory reflected patent law’s traditional staple article of com-

merce doctrine that distribution of a component of a patented device

will not violate the patent if it is suitable for use in other ways. 35

U. S. C §271(c). The doctrine absolves the equivocal conduct of sell-

ing an item with lawful and unlawful uses and limits liability to in-

stances of more acute fault. In this case, the Ninth Circuit misread

Sony to mean that when a product is capable of substantial lawful

use, the producer cannot be held contributorily liable for third par-

ties’ infringing use of it, even when an actual purpose to cause in-

fringing use is shown, unless the distributors had specific knowledge

of infringement at a time when they contributed to the infringement

and failed to act upon that information. Sony did not displace other

secondary liability theories. Pp. 13–17.

(c) Nothing in Sony requires courts to ignore evidence of intent to

promote infringement if such evidence exists. It was never meant to

foreclose rules of fault-based liability derived from the common law.

464 U. S., at 439. Where evidence goes beyond a product’s character-

istics or the knowledge that it may be put to infringing uses, and

shows statements or actions directed to promoting infringement,

Sony’s staple-article rule will not preclude liability. At common law a

copyright or patent defendant who “not only expected but invoked

[infringing use] by advertisement” was liable for infringement.

4 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Syllabus

Kalem Co. v. Harper Brothers, 222 U. S. 55, 62–63. The rule on in-

ducement of infringement as developed in the early cases is no differ-

ent today. Evidence of active steps taken to encourage direct in-

fringement, such as advertising an infringing use or instructing how

to engage in an infringing use, shows an affirmative intent that the

product be used to infringe, and overcomes the law’s reluctance to

find liability when a defendant merely sells a commercial product

suitable for some lawful use. A rule that premises liability on pur-

poseful, culpable expression and conduct does nothing to compromise

legitimate commerce or discourage innovation having a lawful prom-

ise. Pp. 17–20.

(d) On the record presented, respondents’ unlawful objective is un-

mistakable. The classic instance of inducement is by advertisement

or solicitation that broadcasts a message designed to stimulate others

to commit violations. MGM argues persuasively that such a message

is shown here. Three features of the evidence of intent are particu-

larly notable. First, each of the respondents showed itself to be aim-

ing to satisfy a known source of demand for copyright infringement,

the market comprising former Napster users. Respondents’ efforts to

supply services to former Napster users indicate a principal, if not

exclusive, intent to bring about infringement. Second, neither re-

spondent attempted to develop filtering tools or other mechanisms to

diminish the infringing activity using their software. While the

Ninth Circuit treated that failure as irrelevant because respondents

lacked an independent duty to monitor their users’ activity, this evi-

dence underscores their intentional facilitation of their users’ in-

fringement. Third, respondents make money by selling advertising

space, then by directing ads to the screens of computers employing

their software. The more their software is used, the more ads are

sent out and the greater the advertising revenue. Since the extent of

the software’s use determines the gain to the distributors, the com-

mercial sense of their enterprise turns on high-volume use, which the

record shows is infringing. This evidence alone would not justify an

inference of unlawful intent, but its import is clear in the entire re-

cord’s context. Pp. 20–23.

(e) In addition to intent to bring about infringement and distribu-

tion of a device suitable for infringing use, the inducement theory re-

quires evidence of actual infringement by recipients of the device, the

software in this case. There is evidence of such infringement on a gi-

gantic scale. Because substantial evidence supports MGM on all

elements, summary judgment for respondents was error. On re-

mand, reconsideration of MGM’s summary judgment motion will be

in order. Pp. 23–24.

380 F. 3d 1154, vacated and remanded.

Cite as: 545 U. S. ____ (2005) 5

Syllabus

SOUTER, J., delivered the opinion for a unanimous Court. GINSBURG,

J., filed a concurring opinion, in which REHNQUIST, C. J., and KENNEDY,

J., joined. BREYER, J., filed a concurring opinion, in which STEVENS and

O’CONNOR, JJ., joined.

Cite as: 545 U. S. ____ (2005) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash-

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

No. 04–480

_________________

METRO-GOLDWYN-MAYER STUDIOS INC., ET AL.,

PETITIONERS v. GROKSTER, LTD., ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[June 27, 2005]

JUSTICE SOUTER delivered the opinion of the Court.

The question is under what circumstances the distribu-

tor of a product capable of both lawful and unlawful use is

liable for acts of copyright infringement by third parties

using the product. We hold that one who distributes a

device with the object of promoting its use to infringe

copyright, as shown by clear expression or other affirma-

tive steps taken to foster infringement, is liable for the

resulting acts of infringement by third parties.

I

A

Respondents, Grokster, Ltd., and StreamCast Networks,

Inc., defendants in the trial court, distribute free software

products that allow computer users to share electronic

files through peer-to-peer networks, so called because

users’ computers communicate directly with each other,

not through central servers. The advantage of peer-to-

peer networks over information networks of other types

shows up in their substantial and growing popularity.

Because they need no central computer server to mediate

the exchange of information or files among users, the high-

2 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

bandwidth communications capacity for a server may be

dispensed with, and the need for costly server storage

space is eliminated. Since copies of a file (particularly a

popular one) are available on many users’ computers, file

requests and retrievals may be faster than on other types

of networks, and since file exchanges do not travel through

a server, communications can take place between any

computers that remain connected to the network without

risk that a glitch in the server will disable the network in

its entirety. Given these benefits in security, cost, and

efficiency, peer-to-peer networks are employed to store

and distribute electronic files by universities, government

agencies, corporations, and libraries, among others.1

Other users of peer-to-peer networks include individual

recipients of Grokster’s and StreamCast’s software, and

although the networks that they enjoy through using the

software can be used to share any type of digital file, they

have prominently employed those networks in sharing

copyrighted music and video files without authorization.

A group of copyright holders (MGM for short, but includ-

ing motion picture studios, recording companies, song-

writers, and music publishers) sued Grokster and

StreamCast for their users’ copyright infringements,

alleging that they knowingly and intentionally distributed

their software to enable users to reproduce and distribute

the copyrighted works in violation of the Copyright Act, 17

U. S. C. §101 et seq. (2000 ed. and Supp. II).2 MGM sought

——————

1 Peer-to-peer networks have disadvantages as well. Searches on

peer-to-peer networks may not reach and uncover all available files

because search requests may not be transmitted to every computer on

the network. There may be redundant copies of popular files. The

creator of the software has no incentive to minimize storage or band-

width consumption, the costs of which are borne by every user of the

network. Most relevant here, it is more difficult to control the content

of files available for retrieval and the behavior of users.

2 The studios and recording companies and the songwriters and music

publishers filed separate suits against the defendants that were con-

Cite as: 545 U. S. ____ (2005) 3

Opinion of the Court

damages and an injunction.

Discovery during the litigation revealed the way the

software worked, the business aims of each defendant

company, and the predilections of the users. Grokster’s

eponymous software employs what is known as FastTrack

technology, a protocol developed by others and licensed to

Grokster. StreamCast distributes a very similar product

except that its software, called Morpheus, relies on what is

known as Gnutella technology.3 A user who downloads

and installs either software possesses the protocol to send

requests for files directly to the computers of others using

software compatible with FastTrack or Gnutella. On the

FastTrack network opened by the Grokster software, the

user’s request goes to a computer given an indexing capac-

ity by the software and designated a supernode, or to some

other computer with comparable power and capacity to

collect temporary indexes of the files available on the

computers of users connected to it. The supernode (or

indexing computer) searches its own index and may com-

municate the search request to other supernodes. If the

file is found, the supernode discloses its location to the

computer requesting it, and the requesting user can

download the file directly from the computer located. The

copied file is placed in a designated sharing folder on the

requesting user’s computer, where it is available for other

users to download in turn, along with any other file in that

folder.

In the Gnutella network made available by Morpheus,

the process is mostly the same, except that in some ver-

sions of the Gnutella protocol there are no supernodes. In

these versions, peer computers using the protocol commu-

——————

solidated by the District Court.

3 Subsequent versions of Morpheus, released after the record was

made in this case, apparently rely not on Gnutella but on a technology

called Neonet. These developments are not before us.

4 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

nicate directly with each other. When a user enters a

search request into the Morpheus software, it sends the

request to computers connected with it, which in turn pass

the request along to other connected peers. The search

results are communicated to the requesting computer, and

the user can download desired files directly from peers’

computers. As this description indicates, Grokster and

StreamCast use no servers to intercept the content of the

search requests or to mediate the file transfers conducted

by users of the software, there being no central point

through which the substance of the communications

passes in either direction.4

Although Grokster and StreamCast do not therefore

know when particular files are copied, a few searches

using their software would show what is available on the

networks the software reaches. MGM commissioned a

statistician to conduct a systematic search, and his study

showed that nearly 90% of the files available for download

on the FastTrack system were copyrighted works.5 Grok-

ster and StreamCast dispute this figure, raising methodo-

logical problems and arguing that free copying even of

copyrighted works may be authorized by the rightholders.

They also argue that potential noninfringing uses of their

software are significant in kind, even if infrequent in

practice. Some musical performers, for example, have

gained new audiences by distributing their copyrighted

works for free across peer-to-peer networks, and some

——————

4 There is some evidence that both Grokster and StreamCast previ-

ously operated supernodes, which compiled indexes of files available on

all of the nodes connected to them. This evidence, pertaining to previ-

ous versions of the defendants’ software, is not before us and would not

affect our conclusions in any event.

5 By comparison, evidence introduced by the plaintiffs in A & M Re-

cords, Inc. v. Napster, Inc., 239 F. 3d 1004 (CA9 2001), showed that

87% of files available on the Napster filesharing network were copy-

righted, id., at 1013.

Cite as: 545 U. S. ____ (2005) 5

Opinion of the Court

distributors of unprotected content have used peer-to-peer

networks to disseminate files, Shakespeare being an

example. Indeed, StreamCast has given Morpheus users

the opportunity to download the briefs in this very case,

though their popularity has not been quantified.

As for quantification, the parties’ anecdotal and statisti-

cal evidence entered thus far to show the content available

on the FastTrack and Gnutella networks does not say

much about which files are actually downloaded by users,

and no one can say how often the software is used to ob-

tain copies of unprotected material. But MGM’s evidence

gives reason to think that the vast majority of users’

downloads are acts of infringement, and because well over

100 million copies of the software in question are known to

have been downloaded, and billions of files are shared

across the FastTrack and Gnutella networks each month,

the probable scope of copyright infringement is staggering.

Grokster and StreamCast concede the infringement in

most downloads, Brief for Respondents 10, n. 6, and it is

uncontested that they are aware that users employ their

software primarily to download copyrighted files, even if

the decentralized FastTrack and Gnutella networks fail to

reveal which files are being copied, and when. From time

to time, moreover, the companies have learned about their

users’ infringement directly, as from users who have sent

e-mail to each company with questions about playing

copyrighted movies they had downloaded, to whom the

companies have responded with guidance.6 App. 559–563,

808–816, 939–954. And MGM notified the companies of 8

million copyrighted files that could be obtained using their

software.

Grokster and StreamCast are not, however, merely

passive recipients of information about infringing use.

——————

6 The Grokster founder contends that in answering these e-mails he

often did not read them fully. App. 77, 769.

6 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

The record is replete with evidence that from the moment

Grokster and StreamCast began to distribute their free

software, each one clearly voiced the objective that recipi-

ents use it to download copyrighted works, and each took

active steps to encourage infringement.

After the notorious file-sharing service, Napster, was

sued by copyright holders for facilitation of copyright

infringement, A & M Records, Inc. v. Napster, Inc., 114

F. Supp. 2d 896 (ND Cal. 2000), aff’d in part, rev’d in part,

239 F. 3d 1004 (CA9 2001), StreamCast gave away a

software program of a kind known as OpenNap, designed

as compatible with the Napster program and open to

Napster users for downloading files from other Napster

and OpenNap users’ computers. Evidence indicates that

“[i]t was always [StreamCast’s] intent to use [its OpenNap

network] to be able to capture email addresses of [its]

initial target market so that [it] could promote [its]

StreamCast Morpheus interface to them,” App. 861; in-

deed, the OpenNap program was engineered “ ‘to leverage

Napster’s 50 million user base,’ ” id., at 746.

StreamCast monitored both the number of users

downloading its OpenNap program and the number of

music files they downloaded. Id., at 859, 863, 866. It also

used the resulting OpenNap network to distribute copies

of the Morpheus software and to encourage users to adopt

it. Id., at 861, 867, 1039. Internal company documents

indicate that StreamCast hoped to attract large numbers

of former Napster users if that company was shut down by

court order or otherwise, and that StreamCast planned to

be the next Napster. Id., at 861. A kit developed by

StreamCast to be delivered to advertisers, for example,

contained press articles about StreamCast’s potential to

capture former Napster users, id., at 568–572, and it

introduced itself to some potential advertisers as a com-

pany “which is similar to what Napster was,” id., at 884.

It broadcast banner advertisements to users of other

Cite as: 545 U. S. ____ (2005) 7

Opinion of the Court

Napster-compatible software, urging them to adopt its

OpenNap. Id., at 586. An internal e-mail from a company

executive stated: “ ‘We have put this network in place so

that when Napster pulls the plug on their free service . . .

or if the Court orders them shut down prior to that . . . we

will be positioned to capture the flood of their 32 million

users that will be actively looking for an alternative.’ ” Id.,

at 588–589, 861.

Thus, StreamCast developed promotional materials to

market its service as the best Napster alternative. One

proposed advertisement read: “Napster Inc. has an-

nounced that it will soon begin charging you a fee. That’s

if the courts don’t order it shut down first. What will you

do to get around it?” Id., at 897. Another proposed ad

touted StreamCast’s software as the “#1 alternative to

Napster” and asked “[w]hen the lights went off at Napster

. . . where did the users go?” Id., at 836 (ellipsis in origi-

nal).7 StreamCast even planned to flaunt the illegal uses

of its software; when it launched the OpenNap network,

the chief technology officer of the company averred that

“[t]he goal is to get in trouble with the law and get sued.

It’s the best way to get in the new[s].” Id., at 916.

The evidence that Grokster sought to capture the mar-

ket of former Napster users is sparser but revealing, for

Grokster launched its own OpenNap system called Swap-

tor and inserted digital codes into its Web site so that

computer users using Web search engines to look for

“Napster” or “[f]ree filesharing” would be directed to the

Grokster Web site, where they could download the Grok-

ster software. Id., at 992–993. And Grokster’s name is an

apparent derivative of Napster.

——————

7 The record makes clear that StreamCast developed these promo-

tional materials but not whether it released them to the public. Even if

these advertisements were not released to the public and do not show

encouragement to infringe, they illuminate StreamCast’s purposes.

8 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

StreamCast’s executives monitored the number of songs

by certain commercial artists available on their networks,

and an internal communication indicates they aimed to

have a larger number of copyrighted songs available on

their networks than other file-sharing networks. Id., at

868. The point, of course, would be to attract users of a

mind to infringe, just as it would be with their promo-

tional materials developed showing copyrighted songs as

examples of the kinds of files available through Morpheus.

Id., at 848. Morpheus in fact allowed users to search

specifically for “Top 40” songs, id., at 735, which were

inevitably copyrighted. Similarly, Grokster sent users a

newsletter promoting its ability to provide particular,

popular copyrighted materials. Brief for Motion Picture

Studio and Recording Company Petitioners 7–8.

In addition to this evidence of express promotion, mar-

keting, and intent to promote further, the business models

employed by Grokster and StreamCast confirm that their

principal object was use of their software to download

copyrighted works. Grokster and StreamCast receive no

revenue from users, who obtain the software itself for

nothing. Instead, both companies generate income by

selling advertising space, and they stream the advertising

to Grokster and Morpheus users while they are employing

the programs. As the number of users of each program

increases, advertising opportunities become worth more.

Cf. App. 539, 804. While there is doubtless some demand

for free Shakespeare, the evidence shows that substantive

volume is a function of free access to copyrighted work.

Users seeking Top 40 songs, for example, or the latest

release by Modest Mouse, are certain to be far more nu-

merous than those seeking a free Decameron, and Grok-

ster and StreamCast translated that demand into dollars.

Finally, there is no evidence that either company made

an effort to filter copyrighted material from users’

downloads or otherwise impede the sharing of copyrighted

Cite as: 545 U. S. ____ (2005) 9

Opinion of the Court

files. Although Grokster appears to have sent e-mails

warning users about infringing content when it received

threatening notice from the copyright holders, it never

blocked anyone from continuing to use its software to

share copyrighted files. Id., at 75–76. StreamCast not

only rejected another company’s offer of help to monitor

infringement, id., at 928–929, but blocked the Internet

Protocol addresses of entities it believed were trying to

engage in such monitoring on its networks, id., at 917–

922.

B

After discovery, the parties on each side of the case

cross-moved for summary judgment. The District Court

limited its consideration to the asserted liability of Grok-

ster and StreamCast for distributing the current versions

of their software, leaving aside whether either was liable

“for damages arising from past versions of their software,

or from other past activities.” 259 F. Supp. 2d 1029, 1033

(CD Cal. 2003). The District Court held that those who

used the Grokster and Morpheus software to download

copyrighted media files directly infringed MGM’s copy-

rights, a conclusion not contested on appeal, but the court

nonetheless granted summary judgment in favor of Grok-

ster and StreamCast as to any liability arising from dis-

tribution of the then current versions of their software.

Distributing that software gave rise to no liability in the

court’s view, because its use did not provide the distribu-

tors with actual knowledge of specific acts of infringement.

Case No. CV 01 08541 SVW (PJWx) (CD Cal., June 18,

2003), App. 1213.

The Court of Appeals affirmed. 380 F. 3d 1154 (CA9

2004). In the court’s analysis, a defendant was liable as a

contributory infringer when it had knowledge of direct

infringement and materially contributed to the infringe-

ment. But the court read Sony Corp. of America v. Uni-

10 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

versal City Studios, Inc., 464 U. S. 417 (1984), as holding

that distribution of a commercial product capable of sub-

stantial noninfringing uses could not give rise to contribu-

tory liability for infringement unless the distributor had

actual knowledge of specific instances of infringement and

failed to act on that knowledge. The fact that the software

was capable of substantial noninfringing uses in the Ninth

Circuit’s view meant that Grokster and StreamCast were

not liable, because they had no such actual knowledge,

owing to the decentralized architecture of their software.

The court also held that Grokster and StreamCast did not

materially contribute to their users’ infringement because

it was the users themselves who searched for, retrieved,

and stored the infringing files, with no involvement by the

defendants beyond providing the software in the first

place.

The Ninth Circuit also considered whether Grokster and

StreamCast could be liable under a theory of vicarious

infringement. The court held against liability because the

defendants did not monitor or control the use of the soft-

ware, had no agreed-upon right or current ability to su-

pervise its use, and had no independent duty to police

infringement. We granted certiorari. 543 U. S. ___ (2004).

II

A

MGM and many of the amici fault the Court of Ap-

peals’s holding for upsetting a sound balance between the

respective values of supporting creative pursuits through

copyright protection and promoting innovation in new

communication technologies by limiting the incidence of

liability for copyright infringement. The more artistic

protection is favored, the more technological innovation

may be discouraged; the administration of copyright law is

an exercise in managing the trade-off. See Sony Corp. v.

Universal City Studios, supra, at 442; see generally Gins-

Cite as: 545 U. S. ____ (2005) 11

Opinion of the Court

burg, Copyright and Control Over New Technologies of

Dissemination, 101 Colum. L. Rev. 1613 (2001); Lichtman

& Landes, Indirect Liability for Copyright Infringement:

An Economic Perspective, 16 Harv. J. L. & Tech. 395

(2003).

The tension between the two values is the subject of this

case, with its claim that digital distribution of copyrighted

material threatens copyright holders as never before,

because every copy is identical to the original, copying is

easy, and many people (especially the young) use file-

sharing software to download copyrighted works. This

very breadth of the software’s use may well draw the

public directly into the debate over copyright policy, Pe-

ters, Brace Memorial Lecture: Copyright Enters the Public

Domain, 51 J. Copyright Soc. 701, 705–717 (2004) (address

by Register of Copyrights), and the indications are that

the ease of copying songs or movies using software like

Grokster’s and Napster’s is fostering disdain for copyright

protection, Wu, When Code Isn’t Law, 89 Va. L. Rev. 679,

724–726 (2003). As the case has been presented to us,

these fears are said to be offset by the different concern

that imposing liability, not only on infringers but on dis-

tributors of software based on its potential for unlawful

use, could limit further development of beneficial tech-

nologies. See, e.g., Lemley & Reese, Reducing Digital

Copyright Infringement Without Restricting Innovation,

56 Stan. L. Rev. 1345, 1386–1390 (2004); Brief for Innova-

tion Scholars and Economists as Amici Curiae 15–20;

Brief for Emerging Technology Companies as Amici Cu-

riae 19–25; Brief for Intel Corporation as Amicus Curiae

20–22.8

——————

8 The mutual exclusivity of these values should not be overstated,

however. On the one hand technological innovators, including those

writing filesharing computer programs, may wish for effective copyright

protections for their work. See, e.g., Wu, When Code Isn’t Law, 89 Va.

L. Rev. 679, 750 (2003). (StreamCast itself was urged by an associate

12 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

Opinion of the Court

The argument for imposing indirect liability in this case

is, however, a powerful one, given the number of infring-

ing downloads that occur every day using StreamCast’s

and Grokster’s software. When a widely shared service or

product is used to commit infringement, it may be impos-

sible to enforce rights in the protected work effectively

against all direct infringers, the only practical alternative

being to go against the distributor of the copying device for

secondary liability on a theory of contributory or vicarious

infringement. See In re Aimster Copyright Litigation, 334

F. 3d 643, 645–646 (CA7 2003).

One infringes contributorily by intentionally inducing or

encouraging direct infringement, see Gershwin Pub. Corp.

v. Columbia Artists Management, Inc., 443 F. 2d 1159,

1162 (CA2 1971), and infringes vicariously by profiting

from direct infringement while declining to exercise a

right to stop or limit it, Shapiro, Bernstein & Co. v. H. L.

Green Co., 316 F. 2d 304, 307 (CA2 1963).9 Although

——————

to “get [its] technology written down and [its intellectual property]

protected.” App. 866.) On the other hand the widespread distribution

of creative works through improved technologies may enable the

synthesis of new works or generate audiences for emerging artists. See

Eldred v. Ashcroft, 537 U. S. 186, 223–226 (2003) (STEVENS, J., dissent-

ing); Van Houweling, Distributive Values in Copyright, 83 Texas

L. Rev. 1535, 1539–1540, 1562–1564 (2005); Brief for Sovereign Artists

et al. as Amici Curiae 11.

9 We stated in Sony Corp. of America v. Universal City Studios, Inc.,

464 U. S. 417 (1984), that “ ‘the lines between direct infringement,

contributory infringement and vicarious liability are not clearly drawn’

. . . . [R]easoned analysis of [the Sony plaintiffs’ contributory infringe-

ment claim] necessarily entails consideration of arguments and case

law which may also be forwarded under the other labels, and indeed

the parties . . . rely upon such arguments and authority in support of

their respective positions on the issue of contributory infringement,”

id., at 435, n. 17 (quoting Universal City Studios, Inc. v. Sony Corp.,

480 F. Supp. 429, 457–458 (CD Cal. 1979)). In the present case MGM

has argued a vicarious liability theory, which allows imposition of

liability when the defendant profits directly from the infringement and

has a right and ability to supervise the direct infringer, even if the

Cite as: 545 U. S. ____ (2005) 13

Opinion of the Court

“[t]he Copyright Act does not expressly render anyone

liable for infringement committed by another,” Sony Corp.

v. Universal City Studios, 464 U. S., at 434, these doc-

trines of secondary liability emerged from common law

principles and are well established in the law, id., at 486

(Blackmun, J., dissenting); Kalem Co. v. Harper Brothers,

222 U. S. 55, 62–63 (1911); Gershwin Pub. Corp. v. Co-

lumbia Artists Management, supra, at 1162; 3 M. Nimmer

& D. Nimmer, Copyright, §12.04[A] (2005).

B

Despite the currency of these principles of secondary

liability, this Court has dealt with secondary copyright

infringement in only one recent case, and because MGM

has tailored its principal claim to our opinion there, a look

at our earlier holding is in order. In Sony Corp. v. Univer-

sal City Studios, supra, this Court addressed a claim that

secondary liability for infringement can arise from the

very distribution of a commercial product. There, the

product, novel at the time, was what we know today as the

videocassette recorder or VCR. Copyright holders sued

Sony as the manufacturer, claiming it was contributorily

liable for infringement that occurred when VCR owners

taped copyrighted programs because it supplied the means

used to infringe, and it had constructive knowledge that

infringement would occur. At the trial on the merits, the

evidence showed that the principal use of the VCR was for

“ ‘time-shifting,’ ” or taping a program for later viewing at a

more convenient time, which the Court found to be a fair,

not an infringing, use. Id., at 423–424. There was no

——————

defendant initially lacks knowledge of the infringement. See, e.g.,

Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F. 2d 304, 308 (CA2

1963); Dreamland Ball Room, Inc. v. Shapiro, Bernstein & Co., 36 F. 2d

354, 355 (CA7 1929). Because we resolve the case based on an induce-

ment theory, there is no need to analyze separately MGM’s vicarious

liability theory.

14 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

evidence that Sony had expressed an object of bringing

about taping in violation of copyright or had taken active

steps to increase its profits from unlawful taping. Id., at

438. Although Sony’s advertisements urged consumers to

buy the VCR to “ ‘record favorite shows’ ” or “ ‘build a li-

brary’ ” of recorded programs, id., at 459 (Blackmun, J.,

dissenting), neither of these uses was necessarily infring-

ing, id., at 424, 454–455.

On those facts, with no evidence of stated or indicated

intent to promote infringing uses, the only conceivable

basis for imposing liability was on a theory of contributory

infringement arising from its sale of VCRs to consumers

with knowledge that some would use them to infringe. Id.,

at 439. But because the VCR was “capable of commer-

cially significant noninfringing uses,” we held the manu-

facturer could not be faulted solely on the basis of its

distribution. Id., at 442.

This analysis reflected patent law’s traditional staple

article of commerce doctrine, now codified, that distribu-

tion of a component of a patented device will not violate

the patent if it is suitable for use in other ways. 35

U. S. C. §271(c); Aro Mfg. Co. v. Convertible Top Replace-

ment Co., 377 U. S. 476, 485 (1964) (noting codification of

cases); id., at 486, n. 6 (same). The doctrine was devised

to identify instances in which it may be presumed from

distribution of an article in commerce that the distributor

intended the article to be used to infringe another’s pat-

ent, and so may justly be held liable for that infringement.

“One who makes and sells articles which are only adapted

to be used in a patented combination will be presumed to

intend the natural consequences of his acts; he will be

presumed to intend that they shall be used in the combi-

nation of the patent.” New York Scaffolding Co. v. Whit-

ney, 224 F. 452, 459 (CA8 1915); see also James Heekin

Co. v. Baker, 138 F. 63, 66 (CA8 1905); Canda v. Michigan

Malleable Iron Co., 124 F. 486, 489 (CA6 1903); Thomson-

Cite as: 545 U. S. ____ (2005) 15

Opinion of the Court

Houston Electric Co. v. Ohio Brass Co., 80 F. 712, 720–721

(CA6 1897); Red Jacket Mfg. Co. v. Davis, 82 F. 432, 439

(CA7 1897); Holly v. Vergennes Machine Co., 4 F. 74, 82

(CC Vt. 1880); Renwick v. Pond, 20 F. Cas. 536, 541 (No.

11,702) (CC SDNY 1872).

In sum, where an article is “good for nothing else” but

infringement, Canda v. Michigan Malleable Iron Co.,

supra, at 489, there is no legitimate public interest in its

unlicensed availability, and there is no injustice in pre-

suming or imputing an intent to infringe, see Henry v.

A. B. Dick Co., 224 U. S. 1, 48 (1912), overruled on other

grounds, Motion Picture Patents Co. v. Universal Film

Mfg. Co., 243 U. S. 502 (1917). Conversely, the doctrine

absolves the equivocal conduct of selling an item with

substantial lawful as well as unlawful uses, and limits

liability to instances of more acute fault than the mere

understanding that some of one’s products will be mis-

used. It leaves breathing room for innovation and a vigor-

ous commerce. See Sony Corp. v. Universal City Studios,

supra, at 442; Dawson Chemical Co. v. Rohm & Haas Co.,

448 U. S. 176, 221 (1980); Henry v. A. B. Dick Co., supra,

at 48.

The parties and many of the amici in this case think the

key to resolving it is the Sony rule and, in particular, what

it means for a product to be “capable of commercially

significant noninfringing uses.” Sony Corp. v. Universal

City Studios, supra, at 442. MGM advances the argument

that granting summary judgment to Grokster and

StreamCast as to their current activities gave too much

weight to the value of innovative technology, and too little

to the copyrights infringed by users of their software,

given that 90% of works available on one of the networks

was shown to be copyrighted. Assuming the remaining

10% to be its noninfringing use, MGM says this should not

qualify as “substantial,” and the Court should quantify

Sony to the extent of holding that a product used “princi-

16 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

pally” for infringement does not qualify. See Brief for

Motion Picture Studio and Recording Company Petitioners

31. As mentioned before, Grokster and StreamCast reply

by citing evidence that their software can be used to re-

produce public domain works, and they point to copyright

holders who actually encourage copying. Even if in-

fringement is the principal practice with their software

today, they argue, the noninfringing uses are significant

and will grow.

We agree with MGM that the Court of Appeals misap-

plied Sony, which it read as limiting secondary liability

quite beyond the circumstances to which the case applied.

Sony barred secondary liability based on presuming or

imputing intent to cause infringement solely from the

design or distribution of a product capable of substantial

lawful use, which the distributor knows is in fact used for

infringement. The Ninth Circuit has read Sony’s limita-

tion to mean that whenever a product is capable of sub-

stantial lawful use, the producer can never be held con-

tributorily liable for third parties’ infringing use of it; it

read the rule as being this broad, even when an actual

purpose to cause infringing use is shown by evidence

independent of design and distribution of the product,

unless the distributors had “specific knowledge of in-

fringement at a time at which they contributed to the

infringement, and failed to act upon that information.”

380 F. 3d, at 1162 (internal quotation marks and altera-

tions omitted). Because the Circuit found the StreamCast

and Grokster software capable of substantial lawful use, it

concluded on the basis of its reading of Sony that neither

company could be held liable, since there was no showing

that their software, being without any central server,

afforded them knowledge of specific unlawful uses.

This view of Sony, however, was error, converting the

case from one about liability resting on imputed intent to

one about liability on any theory. Because Sony did not

Cite as: 545 U. S. ____ (2005) 17

Opinion of the Court

displace other theories of secondary liability, and because

we find below that it was error to grant summary judg-

ment to the companies on MGM’s inducement claim, we

do not revisit Sony further, as MGM requests, to add a

more quantified description of the point of balance be-

tween protection and commerce when liability rests solely

on distribution with knowledge that unlawful use will

occur. It is enough to note that the Ninth Circuit’s judg-

ment rested on an erroneous understanding of Sony and to

leave further consideration of the Sony rule for a day when

that may be required.

C

Sony’s rule limits imputing culpable intent as a matter

of law from the characteristics or uses of a distributed

product. But nothing in Sony requires courts to ignore

evidence of intent if there is such evidence, and the case

was never meant to foreclose rules of fault-based liability

derived from the common law.10 Sony Corp. v. Universal

City Studios, 464 U. S., at 439 (“If vicarious liability is to

be imposed on Sony in this case, it must rest on the fact

that it has sold equipment with constructive knowledge” of

the potential for infringement). Thus, where evidence

goes beyond a product’s characteristics or the knowledge

that it may be put to infringing uses, and shows state-

ments or actions directed to promoting infringement,

Sony’s staple-article rule will not preclude liability.

The classic case of direct evidence of unlawful purpose

occurs when one induces commission of infringement by

another, or “entic[es] or persuad[es] another” to infringe,

Black’s Law Dictionary 790 (8th ed. 2004), as by advertis-

ing. Thus at common law a copyright or patent defendant

——————

10 Nor does the Patent Act’s exemption from liability for those who

distribute a staple article of commerce, 35 U. S. C. §271(c), extend to

those who induce patent infringement, §271(b).

18 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

who “not only expected but invoked [infringing use] by

advertisement” was liable for infringement “on principles

recognized in every part of the law.” Kalem Co. v. Harper

Brothers, 222 U. S., at 62–63 (copyright infringement).

See also Henry v. A. B. Dick Co., 224 U. S., at 48–49 (con-

tributory liability for patent infringement may be found

where a good’s “most conspicuous use is one which will

coöperate in an infringement when sale to such user is

invoked by advertisement” of the infringing use); Thom-

son-Houston Electric Co. v. Kelsey Electric R. Specialty

Co., 75 F. 1005, 1007–1008 (CA2 1896) (relying on adver-

tisements and displays to find defendant’s “willingness . . .

to aid other persons in any attempts which they may be

disposed to make towards [patent] infringement”); Rum-

ford Chemical Works v. Hecker, 20 F. Cas. 1342, 1346 (No.

12,133) (CC N. J. 1876) (demonstrations of infringing

activity along with “avowals of the [infringing] purpose

and use for which it was made” supported liability for

patent infringement).

The rule on inducement of infringement as developed in

the early cases is no different today.11 Evidence of “active

steps . . . taken to encourage direct infringement,” Oak

Industries, Inc. v. Zenith Electronics Corp., 697 F. Supp.

988, 992 (ND Ill. 1988), such as advertising an infringing

use or instructing how to engage in an infringing use,

show an affirmative intent that the product be used to

infringe, and a showing that infringement was encouraged

overcomes the law’s reluctance to find liability when a

defendant merely sells a commercial product suitable for

some lawful use, see, e.g., Water Technologies Corp. v.

Calco, Ltd., 850 F. 2d 660, 668 (CA Fed. 1988) (liability for

inducement where one “actively and knowingly aid[s] and

abet[s] another’s direct infringement” (emphasis omitted));

Fromberg, Inc. v. Thornhill, 315 F. 2d 407, 412–413 (CA5

——————

11 Inducement has been codified in patent law. Ibid.

Cite as: 545 U. S. ____ (2005) 19

Opinion of the Court

1963) (demonstrations by sales staff of infringing uses

supported liability for inducement); Haworth Inc. v. Her-

man Miller Inc., 37 USPQ 2d 1080, 1090 (WD Mich. 1994)

(evidence that defendant “demonstrate[d] and recom-

mend[ed] infringing configurations” of its product could

support inducement liability); Sims v. Mack Trucks, Inc.,

459 F. Supp. 1198, 1215 (ED Pa. 1978) (finding induce-

ment where the use “depicted by the defendant in its

promotional film and brochures infringes the . . . patent”),

overruled on other grounds, 608 F. 2d 87 (CA3 1979). Cf.

W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and

Keeton on Law of Torts 37 (5th ed. 1984) (“There is a

definite tendency to impose greater responsibility upon a

defendant whose conduct was intended to do harm, or was

morally wrong”).

For the same reasons that Sony took the staple-article

doctrine of patent law as a model for its copyright safe-

harbor rule, the inducement rule, too, is a sensible one for

copyright. We adopt it here, holding that one who distrib-

utes a device with the object of promoting its use to in-

fringe copyright, as shown by clear expression or other

affirmative steps taken to foster infringement, is liable for

the resulting acts of infringement by third parties. We

are, of course, mindful of the need to keep from trenching

on regular commerce or discouraging the development of

technologies with lawful and unlawful potential. Accord-

ingly, just as Sony did not find intentional inducement

despite the knowledge of the VCR manufacturer that its

device could be used to infringe, 464 U. S., at 439, n. 19,

mere knowledge of infringing potential or of actual infring-

ing uses would not be enough here to subject a distributor

to liability. Nor would ordinary acts incident to product

distribution, such as offering customers technical support

or product updates, support liability in themselves. The

inducement rule, instead, premises liability on purposeful,

culpable expression and conduct, and thus does nothing to

20 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

compromise legitimate commerce or discourage innovation

having a lawful promise.

III

A

The only apparent question about treating MGM’s

evidence as sufficient to withstand summary judgment

under the theory of inducement goes to the need on

MGM’s part to adduce evidence that StreamCast and

Grokster communicated an inducing message to their

software users. The classic instance of inducement is by

advertisement or solicitation that broadcasts a message

designed to stimulate others to commit violations. MGM

claims that such a message is shown here. It is undis-

puted that StreamCast beamed onto the computer screens

of users of Napster-compatible programs ads urging the

adoption of its OpenNap program, which was designed, as

its name implied, to invite the custom of patrons of Nap-

ster, then under attack in the courts for facilitating mas-

sive infringement. Those who accepted StreamCast’s

OpenNap program were offered software to perform the

same services, which a factfinder could conclude would

readily have been understood in the Napster market as

the ability to download copyrighted music files. Grokster

distributed an electronic newsletter containing links to

articles promoting its software’s ability to access popular

copyrighted music. And anyone whose Napster or free

file-sharing searches turned up a link to Grokster would

have understood Grokster to be offering the same file-

sharing ability as Napster, and to the same people who

probably used Napster for infringing downloads; that

would also have been the understanding of anyone offered

Grokster’s suggestively named Swaptor software, its

version of OpenNap. And both companies communicated a

clear message by responding affirmatively to requests for

help in locating and playing copyrighted materials.

Cite as: 545 U. S. ____ (2005) 21

Opinion of the Court

In StreamCast’s case, of course, the evidence just de-

scribed was supplemented by other unequivocal indica-

tions of unlawful purpose in the internal communications

and advertising designs aimed at Napster users (“When

the lights went off at Napster . . . where did the users go?”

App. 836 (ellipsis in original)). Whether the messages

were communicated is not to the point on this record. The

function of the message in the theory of inducement is to

prove by a defendant’s own statements that his unlawful

purpose disqualifies him from claiming protection (and

incidentally to point to actual violators likely to be found

among those who hear or read the message). See supra, at

17–19. Proving that a message was sent out, then, is the

preeminent but not exclusive way of showing that active

steps were taken with the purpose of bringing about in-

fringing acts, and of showing that infringing acts took

place by using the device distributed. Here, the summary

judgment record is replete with other evidence that Grok-

ster and StreamCast, unlike the manufacturer and dis-

tributor in Sony, acted with a purpose to cause copyright

violations by use of software suitable for illegal use. See

supra, at 6–9.

Three features of this evidence of intent are particularly

notable. First, each company showed itself to be aiming to

satisfy a known source of demand for copyright infringe-

ment, the market comprising former Napster users.

StreamCast’s internal documents made constant reference

to Napster, it initially distributed its Morpheus software

through an OpenNap program compatible with Napster, it

advertised its OpenNap program to Napster users, and its

Morpheus software functions as Napster did except that it

could be used to distribute more kinds of files, including

copyrighted movies and software programs. Grokster’s

name is apparently derived from Napster, it too initially

offered an OpenNap program, its software’s function is

likewise comparable to Napster’s, and it attempted to

22 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

divert queries for Napster onto its own Web site. Grokster

and StreamCast’s efforts to supply services to former

Napster users, deprived of a mechanism to copy and dis-

tribute what were overwhelmingly infringing files, indi-

cate a principal, if not exclusive, intent on the part of each

to bring about infringement.

Second, this evidence of unlawful objective is given

added significance by MGM’s showing that neither com-

pany attempted to develop filtering tools or other mecha-

nisms to diminish the infringing activity using their soft-

ware. While the Ninth Circuit treated the defendants’

failure to develop such tools as irrelevant because they

lacked an independent duty to monitor their users’ activ-

ity, we think this evidence underscores Grokster’s and

StreamCast’s intentional facilitation of their users’ in-

fringement.12

Third, there is a further complement to the direct evi-

dence of unlawful objective. It is useful to recall that

StreamCast and Grokster make money by selling advertis-

ing space, by directing ads to the screens of computers

employing their software. As the record shows, the more

the software is used, the more ads are sent out and the

greater the advertising revenue becomes. Since the extent

of the software’s use determines the gain to the distribu-

tors, the commercial sense of their enterprise turns on

high-volume use, which the record shows is infringing.13

——————

12 Of course, in the absence of other evidence of intent, a court would

be unable to find contributory infringement liability merely based on a

failure to take affirmative steps to prevent infringement, if the device

otherwise was capable of substantial noninfringing uses. Such a

holding would tread too close to the Sony safe harbor.

13 Grokster and StreamCast contend that any theory of liability based

on their conduct is not properly before this Court because the rulings in

the trial and appellate courts dealt only with the present versions of

their software, not “past acts . . . that allegedly encouraged infringe-

ment or assisted . . . known acts of infringement.” Brief for Respon-

dents 14; see also id., at 34. This contention misapprehends the basis

Cite as: 545 U. S. ____ (2005) 23

Opinion of the Court

This evidence alone would not justify an inference of

unlawful intent, but viewed in the context of the entire

record its import is clear.

The unlawful objective is unmistakable.

B

In addition to intent to bring about infringement and

distribution of a device suitable for infringing use, the

inducement theory of course requires evidence of actual

infringement by recipients of the device, the software in

this case. As the account of the facts indicates, there is

evidence of infringement on a gigantic scale, and there is

no serious issue of the adequacy of MGM’s showing on this

point in order to survive the companies’ summary judg-

ment requests. Although an exact calculation of infringing

use, as a basis for a claim of damages, is subject to dis-

pute, there is no question that the summary judgment

evidence is at least adequate to entitle MGM to go forward

with claims for damages and equitable relief.

* * *

In sum, this case is significantly different from Sony and

reliance on that case to rule in favor of StreamCast and

Grokster was error. Sony dealt with a claim of liability

based solely on distributing a product with alternative

lawful and unlawful uses, with knowledge that some users

would follow the unlawful course. The case struck a bal-

——————

for their potential liability. It is not only that encouraging a particular

consumer to infringe a copyright can give rise to secondary liability for

the infringement that results. Inducement liability goes beyond that,

and the distribution of a product can itself give rise to liability where

evidence shows that the distributor intended and encouraged the

product to be used to infringe. In such a case, the culpable act is not

merely the encouragement of infringement but also the distribution of

the tool intended for infringing use. See Kalem Co. v. Harper Brothers,

222 U. S. 55, 62–63 (1911); Cable/Home Communication Corp. v.

Network Productions, Inc., 902 F. 2d 829, 846 (CA11 1990); A & M

Records, Inc. v. Abdallah, 948 F. Supp. 1449, 1456 (CD Cal. 1996).

24 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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Opinion of the Court

ance between the interests of protection and innovation by

holding that the product’s capability of substantial lawful

employment should bar the imputation of fault and conse-

quent secondary liability for the unlawful acts of others.

MGM’s evidence in this case most obviously addresses a

different basis of liability for distributing a product open

to alternative uses. Here, evidence of the distributors’

words and deeds going beyond distribution as such shows

a purpose to cause and profit from third-party acts of

copyright infringement. If liability for inducing infringe-

ment is ultimately found, it will not be on the basis of

presuming or imputing fault, but from inferring a patently

illegal objective from statements and actions showing

what that objective was.

There is substantial evidence in MGM’s favor on all

elements of inducement, and summary judgment in favor

of Grokster and StreamCast was error. On remand, re-

consideration of MGM’s motion for summary judgment

will be in order.

The judgment of the Court of Appeals is vacated, and

the case is remanded for further proceedings consistent

with this opinion.

It is so ordered.

Cite as: 545 U. S. ____ (2005) 1

GINSBURG, J., concurring

SUPREME COURT OF THE UNITED STATES

_________________

No. 04–480

_________________

METRO-GOLDWYN-MAYER STUDIOS INC., ET AL.,

PETITIONERS v. GROKSTER, LTD., ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[June 27, 2005]

JUSTICE GINSBURG, with whom THE CHIEF JUSTICE and

JUSTICE KENNEDY join, concurring.

I concur in the Court’s decision, which vacates in full the

judgment of the Court of Appeals for the Ninth Circuit,

ante, at 24, and write separately to clarify why I conclude

that the Court of Appeals misperceived, and hence misap-

plied, our holding in Sony Corp. of America v. Universal

City Studios, Inc., 464 U. S. 417 (1984). There is here at

least a “genuine issue as to [a] material fact,” Fed. Rule

Civ. Proc. 56(c), on the liability of Grokster or StreamCast,

not only for actively inducing copyright infringement, but

also or alternatively, based on the distribution of their

software products, for contributory copyright infringe-

ment. On neither score was summary judgment for Grok-

ster and StreamCast warranted.

At bottom, however labeled, the question in this case is

whether Grokster and StreamCast are liable for the direct

infringing acts of others. Liability under our jurispru-

dence may be predicated on actively encouraging (or in-

ducing) infringement through specific acts (as the Court’s

opinion develops) or on distributing a product distributees

use to infringe copyrights, if the product is not capable of

“substantial” or “commercially significant” noninfringing

uses. Sony, 464 U. S., at 442; see also 3 M. Nimmer & D.

Nimmer, Nimmer on Copyright §12.04[A][2] (2005). While

2 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

GINSBURG, J., concurring

the two categories overlap, they capture different culpable

behavior. Long coexisting, both are now codified in patent

law. Compare 35 U. S. C. §271(b) (active inducement

liability), with §271(c) (contributory liability for distribu-

tion of a product not “suitable for substantial noninfring-

ing use”).

In Sony, 464 U. S. 417, the Court considered Sony’s

liability for selling the Betamax video cassette recorder. It

did so enlightened by a full trial record. Drawing an

analogy to the staple article of commerce doctrine from

patent law, the Sony Court observed that the “sale of an

article . . . adapted to [a patent] infringing use” does not

suffice “to make the seller a contributory infringer” if the

article “is also adapted to other and lawful uses.” Id., at

441 (quoting Henry v. A. B. Dick Co., 224 U. S. 1, 48

(1912), overruled on other grounds, Motion Picture Patents

Co. v. Universal Film Mfg. Co., 243 U. S. 502, 517 (1917)).

“The staple article of commerce doctrine” applied to

copyright, the Court stated, “must strike a balance be-

tween a copyright holder’s legitimate demand for effec-

tive—not merely symbolic—protection of the statutory

monopoly, and the rights of others freely to engage in

substantially unrelated areas of commerce.” Sony, 464

U. S., at 442. “Accordingly,” the Court held, “the sale of

copying equipment, like the sale of other articles of com-

merce, does not constitute contributory infringement if the

product is widely used for legitimate, unobjectionable

purposes. Indeed, it need merely be capable of substantial

noninfringing uses.” Ibid. Thus, to resolve the Sony case,

the Court explained, it had to determine “whether the

Betamax is capable of commercially significant noninfring-

ing uses.” Ibid.

To answer that question, the Court considered whether

“a significant number of [potential uses of the Betamax

were] noninfringing.” Ibid. The Court homed in on one

potential use—private, noncommercial time-shifting of

Cite as: 545 U. S. ____ (2005) 3

GINSBURG, J., concurring

television programs in the home (i.e., recording a broad-

cast TV program for later personal viewing). Time-

shifting was noninfringing, the Court concluded, because

in some cases trial testimony showed it was authorized by

the copyright holder, id., at 443–447, and in others it

qualified as legitimate fair use, id., at 447–455. Most

purchasers used the Betamax principally to engage in

time-shifting, id., at 421, 423, a use that “plainly satis-

fie[d]” the Court’s standard, id., at 442. Thus, there was

no need in Sony to “give precise content to the question of

how much [actual or potential] use is commercially signifi-

cant.” Ibid.1 Further development was left for later days

——————

1 JUSTICE BREYER finds in Sony Corp. of America v. Universal City Stu-

dios, Inc., 464 U. S. 417 (1984), a “clear” rule permitting contributory

liability for copyright infringement based on distribution of a product

only when the product “will be used almost exclusively to infringe

copyrights.” Post, at 9–10. But cf. Sony, 464 U. S., at 442 (recognizing

“copyright holder’s legitimate demand for effective—not merely sym-

bolic—protection”). Sony, as I read it, contains no clear, near-

exclusivity test. Nor have Courts of Appeals unanimously recognized

JUSTICE BREYER’s clear rule. Compare A&M Records, Inc. v. Napster,

Inc., 239 F. 3d 1004, 1021 (CA9 2001) (“[E]vidence of actual knowledge

of specific acts of infringement is required to hold a computer system

operator liable for contributory copyright infringement.”), with In re

Aimster Copyright Litigation, 334 F. 3d 643, 649–650 (CA7 2003)

(“[W]hen a supplier is offering a product or service that has noninfring-

ing as well as infringing uses, some estimate of the respective magni-

tudes of these uses is necessary for a finding of contributory infringe-

ment. . . . But the balancing of costs and benefits is necessary only in a

case in which substantial noninfringing uses, present or prospective,

are demonstrated.”). See also Matthew Bender & Co., Inc. v. West Pub.

Co., 158 F. 3d 693, 707 (CA2 1998) (“The Supreme Court applied [the

Sony] test to prevent copyright holders from leveraging the copyrights

in their original work to control distribution of . . . products that might

be used incidentally for infringement, but that had substantial nonin-

fringing uses. . . . The same rationale applies here [to products] that

have substantial, predominant and noninfringing uses as tools for

research and citation.”). All Members of the Court agree, moreover,

that “the Court of Appeals misapplied Sony,” at least to the extent it

read that decision to limit “secondary liability” to a hardly-ever cate-

4 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

GINSBURG, J., concurring

and cases.

The Ninth Circuit went astray, I will endeavor to ex-

plain, when that court granted summary judgment to

Grokster and StreamCast on the charge of contributory

liability based on distribution of their software products.

Relying on its earlier opinion in A&M Records, Inc. v.

Napster, Inc., 239 F. 3d 1004 (CA9 2001), the Court of

Appeals held that “if substantial noninfringing use was

shown, the copyright owner would be required to show

that the defendant had reasonable knowledge of specific

infringing files.” 380 F. 3d 1154, 1161 (CA9 2004). “A

careful examination of the record,” the court concluded,

“indicates that there is no genuine issue of material fact as

to noninfringing use.” Ibid. The appeals court pointed to

the band Wilco, which made one of its albums available for

free downloading, to other recording artists who may have

authorized free distribution of their music through the

Internet, and to public domain literary works and films

available through Grokster’s and StreamCast’s software.

Ibid. Although it acknowledged MGM’s assertion that

“the vast majority of the software use is for copyright

infringement,” the court concluded that Grokster’s and

StreamCast’s proffered evidence met Sony’s requirement

that “a product need only be capable of substantial nonin-

fringing uses.” 380 F. 3d, at 1162.2

This case differs markedly from Sony. Cf. Peters, Brace

Memorial Lecture: Copyright Enters the Public Domain,

51 J. Copyright Soc. 701, 724 (2004) (“The Grokster panel’s

reading of Sony is the broadest that any court has given it

——————

gory, “quite beyond the circumstances to which the case applied.” Ante,

at 16.

2 Grokster and StreamCast, in the Court of Appeals’ view, would be

entitled to summary judgment unless MGM could show that that the

software companies had knowledge of specific acts of infringement and

failed to act on that knowledge—a standard the court held MGM could

not meet. 380 F. 3d, at 1162–1163.

Cite as: 545 U. S. ____ (2005) 5

GINSBURG, J., concurring

. . . .”). Here, there has been no finding of any fair use and

little beyond anecdotal evidence of noninfringing uses. In

finding the Grokster and StreamCast software products

capable of substantial noninfringing uses, the District Court

and the Court of Appeals appear to have relied largely on

declarations submitted by the defendants. These declara-

tions include assertions (some of them hearsay) that a

number of copyright owners authorize distribution of their

works on the Internet and that some public domain material

is available through peer-to-peer networks including those

accessed through Grokster’s and StreamCast’s software.

380 F. 3d, at 1161; 259 F. Supp. 2d 1029, 1035–1036 (CD

Cal. 2003); App. 125–171.

The District Court declared it “undisputed that there

are substantial noninfringing uses for Defendants’ soft-

ware,” thus obviating the need for further proceedings.

259 F. Supp. 2d, at 1035. This conclusion appears to rest

almost entirely on the collection of declarations submitted

by Grokster and StreamCast. Ibid. Review of these

declarations reveals mostly anecdotal evidence, sometimes

obtained second-hand, of authorized copyrighted works or

public domain works available online and shared through

peer-to-peer networks, and general statements about the

benefits of peer-to-peer technology. See, e.g., Decl. of Janis

Ian ¶13, App. 128 (“P2P technologies offer musicians an

alternative channel for promotion and distribution.”);

Decl. of Gregory Newby ¶12, id., at 136 (“Numerous au-

thorized and public domain Project Gutenberg eBooks are

made available on Morpheus, Kazaa, Gnutella, Grokster,

and similar software products.”); Decl. of Aram Sinnreich

¶6, id., at 151 (“file sharing seems to have a net positive

impact on music sales”); Decl. of John Busher ¶8, id., at

166 (“I estimate that Acoustica generates sales of between

$1,000 and $10,000 per month as a result of the distribu-

tion of its trialware software through the Gnutella and

FastTrack Networks.”); Decl. of Patricia D. Hoekman ¶¶3–

6 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

GINSBURG, J., concurring

4, id., at 169–170 (search on Morpheus for “President

Bush speeches” found several video recordings, searches

for “Declaration of Independence” and “Bible” found vari-

ous documents and declarant was able to download a copy

of the Declaration); Decl. of Sean L. Mayers ¶11, id., at 67

(“Existing open, decentralized peer-to-peer file-sharing

networks . . . offer content owners distinct business advan-

tages over alternate online distribution technologies.”).

Compare Decl. of Brewster Kahle ¶20, id., at 142 (“Those

who download the Prelinger films . . . are entitled to redis-

tribute those files, and the Archive welcomes their redis-

tribution by the Morpheus-Grokster-KaZaa community of

users.”), with Deposition of Brewster Kahle, id., at 396–

403 (Sept. 18, 2002) (testifying that he has no knowledge

of any person downloading a Prelinger film using Mor-

pheus, Grokster, or KaZaA). Compare also Decl. of Rich-

ard Prelinger ¶17, id., at 147 (“[W]e welcome further

redistribution of the Prelinger films . . . by individuals

using peer-to-peer software products like Morpheus, Ka-

ZaA and Grokster.”), with Deposition of Richard Prelinger,

id., at 410–411 (Oct. 1, 2002) (“Q. What is your under-

standing of Grokster? A. I have no understanding of

Grokster. . . . Q. Do you know whether any user of the

Grokster software has made available to share any Prelin-

ger film? A. No.”). See also Deposition of Aram Sinnreich,

id., at 390 (Sept. 25, 2002) (testimony about the band

Wilco based on “[t]he press and industry news groups and

scuttlebutt.”). These declarations do not support summary

judgment in the face of evidence, proffered by MGM, of

overwhelming use of Grokster’s and StreamCast’s soft-

ware for infringement.3

——————

3 JUSTICE BREYER finds support for summary judgment in this motley

collection of declarations and in a survey conducted by an expert

retained by MGM. Post, at 4–8. That survey identified 75% of the files

available through Grokster as copyrighted works owned or controlled

by the plaintiffs, and 15% of the files as works likely copyrighted. App.

Cite as: 545 U. S. ____ (2005) 7

GINSBURG, J., concurring

Even if the absolute number of noninfringing files copied

using the Grokster and StreamCast software is large, it does

not follow that the products are therefore put to substantial

noninfringing uses and are thus immune from liability. The

number of noninfringing copies may be reflective of, and

dwarfed by, the huge total volume of files shared. Further,

the District Court and the Court of Appeals did not sharply

distinguish between uses of Grokster’s and StreamCast’s

software products (which this case is about) and uses of

peer-to-peer technology generally (which this case is not

about).

In sum, when the record in this case was developed,

there was evidence that Grokster’s and StreamCast’s

products were, and had been for some time, overwhelm-

ingly used to infringe, ante, at 4–6; App. 434–439, 476–

481, and that this infringement was the overwhelming

source of revenue from the products, ante, at 8–9; 259

F. Supp. 2d, at 1043–1044. Fairly appraised, the evidence

was insufficient to demonstrate, beyond genuine debate, a

reasonable prospect that substantial or commercially

significant noninfringing uses were likely to develop over

——————

439. As to the remaining 10% of the files, “there was not enough

information to form reasonable conclusions either as to what those files

even consisted of, and/or whether they were infringing or non-

infringing.” App. 479. Even assuming, as JUSTICE BREYER does, that

the Sony Court would have absolved Sony of contributory liability

solely on the basis of the use of the Betamax for authorized time-

shifting, post, at 3–4, summary judgment is not inevitably appropriate

here. Sony stressed that the plaintiffs there owned “well below 10%” of

copyrighted television programming, 464 U. S., at 443, and found,

based on trial testimony from representatives of the four major sports

leagues and other individuals authorized to consent to home-recording

of their copyrighted broadcasts, that a similar percentage of program

copying was authorized, id., at 424. Here, the plaintiffs allegedly

control copyrights for 70% or 75% of the material exchanged through

the Grokster and StreamCast software, 380 F. 3d, at 1158; App. 439,

and the District Court does not appear to have relied on comparable

testimony about authorized copying from copyright holders.

8 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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GINSBURG, J., concurring

time. On this record, the District Court should not have

ruled dispositively on the contributory infringement

charge by granting summary judgment to Grokster and

StreamCast.4

If, on remand, the case is not resolved on summary

judgment in favor of MGM based on Grokster and

StreamCast actively inducing infringement, the Court of

Appeals, I would emphasize, should reconsider, on a fuller

record, its interpretation of Sony’s product distribution

holding.

——————

4 The

District Court’s conclusion that “[p]laintiffs do not dispute that

Defendants’ software is being used, and could be used, for substantial

noninfringing purposes,” 259 F. Supp. 2d 1029, 1036 (CD Cal. 2003);

accord 380 F. 3d, at 1161, is, to say the least, dubious. In the courts

below and in this Court, MGM has continuously disputed any such

conclusion. Brief for Motion Picture Studio and Recording Company

Petitioners 30–38; Brief for MGM Plaintiffs-Appellants in No. 03–

55894, etc. (CA9), p. 41; App. 356–357, 361–365.

Cite as: 545 U. S. ____ (2005) 1

BREYER, J., concurring

SUPREME COURT OF THE UNITED STATES

_________________

No. 04–480

_________________

METRO-GOLDWYN-MAYER STUDIOS INC., ET AL.,

PETITIONERS v. GROKSTER, LTD., ET AL.

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[June 27, 2005]

JUSTICE BREYER, with whom JUSTICE STEVENS and

JUSTICE O’CONNOR join, concurring.

I agree with the Court that the distributor of a dual-use

technology may be liable for the infringing activities of

third parties where he or she actively seeks to advance the

infringement. Ante, at 1. I further agree that, in light of

our holding today, we need not now “revisit” Sony Corp. of

America v. Universal City Studios, Inc., 464 U. S. 417

(1984). Ante, at 17. Other Members of the Court, how-

ever, take up the Sony question: whether Grokster’s prod-

uct is “capable of ‘substantial’ or ‘commercially significant’

noninfringing uses.” Ante, at 1 (GINSBURG, J., concurring)

(quoting Sony, supra, at 442). And they answer that

question by stating that the Court of Appeals was wrong

when it granted summary judgment on the issue in Grok-

ster’s favor. Ante, at 4. I write to explain why I disagree

with them on this matter.

I

The Court’s opinion in Sony and the record evidence (as

described and analyzed in the many briefs before us)

together convince me that the Court of Appeals’ conclusion

has adequate legal support.

A

I begin with Sony’s standard. In Sony, the Court con-

2 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

BREYER, J., concurring

sidered the potential copyright liability of a company that

did not itself illegally copy protected material, but rather

sold a machine—a Video Cassette Recorder (VCR)—that

could be used to do so. A buyer could use that machine for

noninfringing purposes, such as recording for later view-

ing (sometimes called “ ‘time-shifting,’ ” Sony, 464 U. S., at

421) uncopyrighted television programs or copyrighted

programs with a copyright holder’s permission. The buyer

could use the machine for infringing purposes as well,

such as building libraries of taped copyrighted programs.

Or, the buyer might use the machine to record copyrighted

programs under circumstances in which the legal status of

the act of recording was uncertain (i.e., where the copying

may, or may not, have constituted a “fair use,” id., at 425–

426). Sony knew many customers would use its VCRs to

engage in unauthorized copying and “ ‘library-building.’ ”

Id., at 458–459 (Blackmun, J., dissenting). But that fact,

said the Court, was insufficient to make Sony itself an

infringer. And the Court ultimately held that Sony was

not liable for its customers’ acts of infringement.

In reaching this conclusion, the Court recognized the

need for the law, in fixing secondary copyright liability, to

“strike a balance between a copyright holder’s legitimate

demand for effective—not merely symbolic—protection of

the statutory monopoly, and the rights of others freely to

engage in substantially unrelated areas of commerce.” Id.,

at 442. It pointed to patent law’s “staple article of com-

merce” doctrine, ibid., under which a distributor of a

product is not liable for patent infringement by its cus-

tomers unless that product is “unsuited for any commer-

cial noninfringing use.” Dawson Chemical Co. v. Rohm &

Haas Co., 448 U. S. 176, 198 (1980). The Court wrote that

the sale of copying equipment, “like the sale of other arti-

cles of commerce, does not constitute contributory in-

fringement if the product is widely used for legitimate,

unobjectionable purposes. Indeed, it need merely be capa-

Cite as: 545 U. S. ____ (2005) 3

BREYER, J., concurring

ble of substantial noninfringing uses.” Sony, 464 U. S., at

442 (emphasis added). The Court ultimately characterized

the legal “question” in the particular case as “whether

[Sony’s VCR] is capable of commercially significant nonin-

fringing uses” (while declining to give “precise content” to

these terms). Ibid. (emphasis added).

It then applied this standard. The Court had before it a

survey (commissioned by the District Court and then

prepared by the respondents) showing that roughly 9% of

all VCR recordings were of the type—namely, religious,

educational, and sports programming—owned by produc-

ers and distributors testifying on Sony’s behalf who did

not object to time-shifting. See Brief for Respondent

Universal Studios et al. O. T. 1983, No. 81–1687, pp. 52–

53; see also Sony, supra, at 424 (7.3% of all Sony VCR use

is to record sports programs; representatives of the sports

leagues do not object). A much higher percentage of VCR

users had at one point taped an authorized program, in

addition to taping unauthorized programs. And the plain-

tiffs—not a large class of content providers as in this

case—owned only a small percentage of the total available

unauthorized programming. See ante, at 6–7, and n. 3

(GINSBURG, J., concurring). But of all the taping actually

done by Sony’s customers, only around 9% was of the sort

the Court referred to as authorized.

The Court found that the magnitude of authorized

programming was “significant,” and it also noted the

“significant potential for future authorized copying.” 464

U. S., at 444. The Court supported this conclusion by

referencing the trial testimony of professional sports

league officials and a religious broadcasting representa-

tive. Id., at 444, and n. 24. It also discussed (1) a Los

Angeles educational station affiliated with the Public

Broadcasting Service that made many of its programs

available for home taping, and (2) Mr. Rogers’ Neighbor-

hood, a widely watched children’s program. Id., at 445.

4 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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BREYER, J., concurring

On the basis of this testimony and other similar evidence,

the Court determined that producers of this kind had

authorized duplication of their copyrighted programs “in

significant enough numbers to create a substantial market

for a noninfringing use of the” VCR. Id., at 447, n. 28

(emphasis added).

The Court, in using the key word “substantial,” indi-

cated that these circumstances alone constituted a suffi-

cient basis for rejecting the imposition of secondary liabil-

ity. See id., at 456 (“Sony demonstrated a significant

likelihood that substantial numbers of copyright holders”

would not object to time-shifting (emphasis added)).

Nonetheless, the Court buttressed its conclusion by find-

ing separately that, in any event, unauthorized time-

shifting often constituted not infringement, but “fair use.”

Id., at 447–456.

B

When measured against Sony’s underlying evidence and

analysis, the evidence now before us shows that Grokster

passes Sony’s test—that is, whether the company’s prod-

uct is capable of substantial or commercially significant

noninfringing uses. Id., at 442. For one thing, petitioners’

(hereinafter MGM) own expert declared that 75% of cur-

rent files available on Grokster are infringing and 15% are

“likely infringing.” See App. 436–439, ¶¶6–17 (Decl. of Dr.

Ingram Olkin); cf. ante, at 4 (opinion of the Court). That

leaves some number of files near 10% that apparently are

noninfringing, a figure very similar to the 9% or so of

authorized time-shifting uses of the VCR that the Court

faced in Sony.

As in Sony, witnesses here explained the nature of the

noninfringing files on Grokster’s network without detailed

quantification. Those files include:

—Authorized copies of music by artists such as Wilco,

Cite as: 545 U. S. ____ (2005) 5

BREYER, J., concurring

Janis Ian, Pearl Jam, Dave Matthews, John Mayer, and

others. See App. at 152–153, ¶¶9–13 (Decl. of Aram

Sinnreich) (Wilco’s “lesson has already been adopted by

artists still signed to their major labels”); id., at 170, ¶¶5–

7 (Decl. of Patricia D. Hoekman) (locating “numerous

audio recordings” that were authorized for swapping); id.,

at 74, ¶10 (Decl. of Daniel B. Rung) (describing Grokster’s

partnership with a company that hosts music from thou-

sands of independent artists)

—Free electronic books and other works from various

online publishers, including Project Gutenberg. See id., at

136, ¶12 (Decl. of Gregory B. Newby) (“Numerous author-

ized and public domain Project Gutenberg eBooks are

made available” on Grokster. Project Gutenberg “wel-

comes this widespread sharing . . . using these software

products[,] since they assist us in meeting our objectives”);

id., at 159–160, ¶32 (Decl. of Sinnreich)

—Public domain and authorized software, such as WinZip

8.1. Id., at 170, ¶8 (Decl. of Hoekman); id., at 165, ¶¶4–7

(Decl. of John Busher)

—Licensed music videos and television and movie seg-

ments distributed via digital video packaging with the

permission of the copyright holder. Id., at 70, ¶24 (Decl. of

Sean L. Mayers)

The nature of these and other lawfully swapped files is

such that it is reasonable to infer quantities of current

lawful use roughly approximate to those at issue in Sony.

At least, MGM has offered no evidence sufficient to sur-

vive summary judgment that could plausibly demonstrate

a significant quantitative difference. See ante, at 4 (opin-

ion of the Court); see also Brief for Motion Picture Studio

and Recording Company Petitioners i (referring to “at

6 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

BREYER, J., concurring

least 90% of the total use of the services”); but see ante, at

6–7, n. 3 (GINSBURG, J., concurring). To be sure, in quan-

titative terms these uses account for only a small percent-

age of the total number of uses of Grokster’s product. But

the same was true in Sony, which characterized the rela-

tively limited authorized copying market as “substantial.”

(The Court made clear as well in Sony that the amount of

material then presently available for lawful copying—if

not actually copied—was significant, see 464 U. S., at 444,

and the same is certainly true in this case.)

Importantly, Sony also used the word “capable,” asking

whether the product is “capable of” substantial noninfring-

ing uses. Its language and analysis suggest that a figure

like 10%, if fixed for all time, might well prove insufficient,

but that such a figure serves as an adequate foundation

where there is a reasonable prospect of expanded legiti-

mate uses over time. See ibid. (noting a “significant po-

tential for future authorized copying”). And its language

also indicates the appropriateness of looking to potential

future uses of the product to determine its “capability.”

Here the record reveals a significant future market for

noninfringing uses of Grokster-type peer-to-peer software.

Such software permits the exchange of any sort of digital

file—whether that file does, or does not, contain copy-

righted material. As more and more uncopyrighted infor-

mation is stored in swappable form, it seems a likely

inference that lawful peer-to-peer sharing will become

increasingly prevalent. See, e.g., App. 142, ¶20 (Decl. of

Brewster Kahle) (“The [Internet Archive] welcomes [the]

redistribution [of authorized films] by the Morpheus-

Grokster-KaZaa community of users”); id., at 166, ¶8

(Decl. of Busher) (sales figures of $1,000 to $10,000 per

month through peer-to-peer networks “will increase in the

future as Acoustica’s trialware is more widely distributed

through these networks”); id., at 156–164, ¶¶21–40 (Decl.

of Sinnreich).

Cite as: 545 U. S. ____ (2005) 7

BREYER, J., concurring

And that is just what is happening. Such legitimate

noninfringing uses are coming to include the swapping of:

research information (the initial purpose of many peer-to-

peer networks); public domain films (e.g., those owned by

the Prelinger Archive); historical recordings and digital

educational materials (e.g., those stored on the Internet

Archive); digital photos (OurPictures, for example, is

starting a P2P photo-swapping service); “shareware” and

“freeware” (e.g., Linux and certain Windows software);

secure licensed music and movie files (Intent MediaWorks,

for example, protects licensed content sent across P2P

networks); news broadcasts past and present (the BBC

Creative Archive lets users “rip, mix and share the BBC”);

user-created audio and video files (including “podcasts”

that may be distributed through P2P software); and all

manner of free “open content” works collected by Creative

Commons (one can search for Creative Commons material

on StreamCast). See Brief for Distributed Computing

Industry Association as Amicus Curiae 15–26; Merges, A

New Dynamism in the Public Domain, 71 U. Chi. L. Rev.

183 (2004). I can find nothing in the record that suggests

that this course of events will not continue to flow natu-

rally as a consequence of the character of the software

taken together with the foreseeable development of the

Internet and of information technology. Cf. ante, at 1–2

(opinion of the Court) (discussing the significant benefits

of peer-to-peer technology).

There may be other now-unforeseen noninfringing uses

that develop for peer-to-peer software, just as the home-

video rental industry (unmentioned in Sony) developed for

the VCR. But the foreseeable development of such uses,

when taken together with an estimated 10% noninfringing

material, is sufficient to meet Sony’s standard. And while

Sony considered the record following a trial, there are no

facts asserted by MGM in its summary judgment filings

that lead me to believe the outcome after a trial here could

8 METRO-GOLDWYN-MAYER STUDIOS INC. v.

GROKSTER, LTD.

BREYER, J., concurring

be any different. The lower courts reached the same

conclusion.

Of course, Grokster itself may not want to develop these

other noninfringing uses. But Sony’s standard seeks to

protect not the Groksters of this world (which in any event

may well be liable under today’s holding), but the devel-

opment of technology more generally. And Grokster’s

desires in this respect are beside the point.

II

The real question here, I believe, is not whether the

record evidence satisfies Sony. As I have interpreted the

standard set forth in that case, it does. And of the Courts

of Appeals that have considered the matter, only one has

proposed interpreting Sony more strictly than I would

do—in a case where the product might have failed under

any standard. In re Aimster Copyright Litigation, 334

F. 3d 643, 653 (CA7 2003) (defendant “failed to show that

its service is ever used for any purpose other than to in-

fringe” copyrights (emphasis added)); see Matthew Bender

& Co., Inc. v. West Pub. Co., 158 F. 3d 693, 706–707 (CA2

1998) (court did not require that noninfringing uses be

“predominant,” it merely found that they were predomi-

nant, and therefore provided no analysis of Sony’s bounda-

ries); but see ante, at 3 n. 1 (GINSBURG, J., concurring); see

also A&M Records v. Napster, Inc., 239 F. 3d 1004, 1020

(CA9 2001) (discussing Sony); Cable/Home Communica-

tion Corp. v. Network Productions, Inc., 902 F. 2d 829,

842–847 (CA11 1990) (same); Vault Corp. v. Quaid Soft-

ware, Ltd., 847 F. 2d 255, 262 (CA5 1988) (same); cf. Dy-

nacore Holdings Corp. v. U. S. Philips Corp., 363 F. 3d

1263, 1275 (CA Fed. 2004) (same); see also Doe v. GTE

Corp., 347 F. 3d 655, 661 (CA7 2003) (“A person may be

liable as a contributory infringer if the product or service

it sells has no (or only slight) legal use”).

Instead, the real question is whether we should modify

Cite as: 545 U. S. ____ (2005) 9

BREYER, J., concurring

the Sony standard, as MGM requests, or interpret Sony

more strictly, as I believe JUSTICE GINSBURG’s approach

would do in practice. Compare ante, at 4–8 (concurring)

(insufficient evidence in this case of both present lawful

uses and of a reasonable prospect that substantial nonin-

fringing uses would develop over time), with Sony, 464

U. S., at 442–447 (basing conclusion as to the likely exis-

tence of a substantial market for authorized copying upon

general declarations, some survey data, and common

sense).

As I have said, Sony itself sought to “strike a balance

between a copyright holder’s legitimate demand for effec-

tive—not merely symbolic—protection of the statutory

monopoly, and the rights of others freely to engage in

substantially unrelated areas of commerce.” Id., at 442.

Thus, to determine whether modification, or a strict inter-

pretation, of Sony is needed, I would ask whether MGM

has shown that Sony incorrectly balanced copyright and

new-technology interests. In particular: (1) Has Sony (as I

interpret it) worked to protect new technology? (2) If so,

would modification or strict interpretation significantly

weaken that protection? (3) If so, would new or necessary

copyright-related benefits outweigh any such weakening?

A

The first question is the easiest to answer. Sony’s rule,

as I interpret it, has provided entrepreneurs with needed

assurance that they will be shielded from copyright liabil-

ity as they bring valuable new technologies to market.

Sony’s rule is clear. That clarity allows those who de-

velop new products that are capable of substantial nonin-

fringing uses to know, ex ante, that distribution of their

product will not yield massive monetary liability. At the

same time, it helps deter them from distributing products

that have no other real function than—or that are specifi-

cally intended for—copyright infringement, deterrence

10 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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BREYER, J., concurring

that the Court’s holding today reinforces (by adding a

weapon to the copyright holder’s legal arsenal).

Sony’s rule is strongly technology protecting. The rule

deliberately makes it difficult for courts to find secondary

liability where new technology is at issue. It establishes

that the law will not impose copyright liability upon the

distributors of dual-use technologies (who do not them-

selves engage in unauthorized copying) unless the product

in question will be used almost exclusively to infringe

copyrights (or unless they actively induce infringements as

we today describe). Sony thereby recognizes that the

copyright laws are not intended to discourage or to control

the emergence of new technologies, including (perhaps

especially) those that help disseminate information and

ideas more broadly or more efficiently. Thus Sony’s rule

shelters VCRs, typewriters, tape recorders, photocopiers,

computers, cassette players, compact disc burners, digital

video recorders, MP3 players, Internet search engines, and

peer-to-peer software. But Sony’s rule does not shelter

descramblers, even if one could theoretically use a de-

scrambler in a noninfringing way. 464 U. S., at 441–442;

Compare Cable/Home Communication Corp., supra, at

837–850 (developer liable for advertising television signal

descrambler), with Vault Corp., supra, at 262 (primary use

infringing but a substantial noninfringing use).

Sony’s rule is forward looking. It does not confine its

scope to a static snapshot of a product’s current uses

(thereby threatening technologies that have undeveloped

future markets). Rather, as the VCR example makes

clear, a product’s market can evolve dramatically over

time. And Sony—by referring to a capacity for substantial

noninfringing uses—recognizes that fact. Sony’s word

“capable” refers to a plausible, not simply a theoretical,

likelihood that such uses will come to pass, and that fact

anchors Sony in practical reality. Cf. Aimster, supra, at

651.

Cite as: 545 U. S. ____ (2005) 11

BREYER, J., concurring

Sony’s rule is mindful of the limitations facing judges

where matters of technology are concerned. Judges have

no specialized technical ability to answer questions about

present or future technological feasibilility or commercial

viability where technology professionals, engineers, and

venture capitalists themselves may radically disagree and

where answers may differ depending upon whether one

focuses upon the time of product development or the time

of distribution. Consider, for example, the question

whether devices can be added to Grokster’s software that

will filter out infringing files. MGM tells us this is easy

enough to do, as do several amici that produce and sell the

filtering technology. See, e.g., Brief for Motion Picture

Studio Petitioners 11; Brief for Audible Magic Corp. et al.

as Amicus Curiae 3–10. Grokster says it is not at all easy

to do, and not an efficient solution in any event, and sev-

eral apparently disinterested computer science professors

agree. See Brief for Respondents 31; Brief for Computer

Science Professors as Amicus Curiae 6–10, 14–18. Which

account should a judge credit? Sony says that the judge

will not necessarily have to decide.

Given the nature of the Sony rule, it is not surprising

that in the last 20 years, there have been relatively few

contributory infringement suits—based on a product

distribution theory—brought against technology providers

(a small handful of federal appellate court cases and per-

haps fewer than two dozen District Court cases in the last

20 years). I have found nothing in the briefs or the record

that shows that Sony has failed to achieve its innovation-

protecting objective.

B

The second, more difficult, question is whether a modi-

fied Sony rule (or a strict interpretation) would signifi-

cantly weaken the law’s ability to protect new technology.

JUSTICE GINSBURG’s approach would require defendants

12 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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BREYER, J., concurring

to produce considerably more concrete evidence—more

than was presented here—to earn Sony’s shelter. That

heavier evidentiary demand, and especially the more

dramatic (case-by-case balancing) modifications that MGM

and the Government seek, would, I believe, undercut the

protection that Sony now offers.

To require defendants to provide, for example, detailed

evidence—say business plans, profitability estimates,

projected technological modifications, and so forth—would

doubtless make life easier for copyrightholder plaintiffs.

But it would simultaneously increase the legal uncertainty

that surrounds the creation or development of a new

technology capable of being put to infringing uses. Inven-

tors and entrepreneurs (in the garage, the dorm room, the

corporate lab, or the boardroom) would have to fear (and

in many cases endure) costly and extensive trials when

they create, produce, or distribute the sort of information

technology that can be used for copyright infringement.

They would often be left guessing as to how a court, upon

later review of the product and its uses, would decide

when necessarily rough estimates amounted to sufficient

evidence. They would have no way to predict how courts

would weigh the respective values of infringing and nonin-

fringing uses; determine the efficiency and advisability of

technological changes; or assess a product’s potential

future markets. The price of a wrong guess—even if it

involves a good-faith effort to assess technical and com-

mercial viability—could be large statutory damages (not

less than $750 and up to $30,000 per infringed work). 17

U. S. C. §504(c)(1). The additional risk and uncertainty

would mean a consequent additional chill of technological

development.

C

The third question—whether a positive copyright impact

would outweigh any technology-related loss—I find the

Cite as: 545 U. S. ____ (2005) 13

BREYER, J., concurring

most difficult of the three. I do not doubt that a more

intrusive Sony test would generally provide greater reve-

nue security for copyright holders. But it is harder to

conclude that the gains on the copyright swings would

exceed the losses on the technology roundabouts.

For one thing, the law disfavors equating the two differ-

ent kinds of gain and loss; rather, it leans in favor of

protecting technology. As Sony itself makes clear, the

producer of a technology which permits unlawful copying

does not himself engage in unlawful copying—a fact that

makes the attachment of copyright liability to the crea-

tion, production, or distribution of the technology an ex-

ceptional thing. See 464 U. S., at 431 (courts “must be

circumspect” in construing the copyright laws to preclude

distribution of new technologies). Moreover, Sony has

been the law for some time. And that fact imposes a seri-

ous burden upon copyright holders like MGM to show a

need for change in the current rules of the game, including

a more strict interpretation of the test. See, e.g., Brief for

Motion Picture Studio Petitioners 31 (Sony should not

protect products when the “primary or principal” use is

infringing).

In any event, the evidence now available does not, in my

view, make out a sufficiently strong case for change. To

say this is not to doubt the basic need to protect copy-

righted material from infringement. The Constitution

itself stresses the vital role that copyright plays in advanc-

ing the “useful Arts.” Art. I, §8, cl. 8. No one disputes

that “reward to the author or artist serves to induce re-

lease to the public of the products of his creative genius.”

United States v. Paramount Pictures, Inc., 334 U. S. 131,

158 (1948). And deliberate unlawful copying is no less an

unlawful taking of property than garden-variety theft.

See, e.g., 18 U. S. C. §2319 (criminal copyright infringe-

ment); §1961(1)(B) (copyright infringement can be a predi-

cate act under the Racketeer Influenced and Corrupt

14 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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BREYER, J., concurring

Organizations Act); §1956(c)(7)(D) (money laundering

includes the receipt of proceeds from copyright infringe-

ment). But these highly general principles cannot by

themselves tell us how to balance the interests at issue in

Sony or whether Sony’s standard needs modification. And

at certain key points, information is lacking.

Will an unmodified Sony lead to a significant diminution

in the amount or quality of creative work produced? Since

copyright’s basic objective is creation and its revenue

objectives but a means to that end, this is the underlying

copyright question. See Twentieth Century Music Corp. v.

Aiken, 422 U. S. 151, 156 (1975) (“Creative work is to be

encouraged and rewarded, but private motivation must

ultimately serve the cause of promoting broad public

availability of literature, music, and the other arts”). And

its answer is far from clear.

Unauthorized copying likely diminishes industry

revenue, though it is not clear by how much. Compare

S. Liebowitz, Will MP3 Downloads Annihilate the

Record Industry? The Evidence So Far, p. 2 (June 2003),

http://www.utdallas.edu/~liebowit/intprop/records.pdf

(all Internet materials as visited June 24, 2005, and avail-

able in Clerk of Court’s case file) (file sharing

has caused a decline in music sales), and Press Release,

Informa Media Group Report (citing Music on the Internet

(5th ed. 2004)) (estimating total lost sales to the music

industry in the range of $2 billion annually),

at http://www.informatm.com, with F. Oberholzer

& K. Strumpf, The Effect of File Sharing on Record

Sales: An Empirical Analysis, p. 24 (Mar. 2004),

www.unc.edu/~cigar/papers/FileSharing_March2004.pdf

(academic study concluding that “file sharing has

no statistically significant effect on purchases of the

average album”), and McGuire, Study: File-Sharing

No Threat to Music Sales (Mar. 29, 2004),

http://www.washingtonpost.com/ac2/wp-dyn/A34300-2004

Cite as: 545 U. S. ____ (2005) 15

BREYER, J., concurring

Mar29?language=printer (discussing mixed evidence).

The extent to which related production has actually and

resultingly declined remains uncertain, though there is

good reason to believe that the decline, if any, is not sub-

stantial. See, e.g., M. Madden, Pew Internet & American

Life Project, Artists, Musicians, and the Internet, p. 21,

http://www.pewinternet.org/pdfs/PIP_Artists.Musicians_

Report.pdf (nearly 70% of musicians believe that file shar-

ing is a minor threat or no threat at all to creative indus-

tries); Benkler, Sharing Nicely: On Shareable Goods and

the Emergence of Sharing as a Modality of Economic

Production, 114 Yale L. J. 273, 351–352 (2004) (“Much of

the actual flow of revenue to artists—from performances

and other sources—is stable even assuming a complete

displacement of the CD market by peer-to-peer distribu-

tion . . . . [I]t would be silly to think that music, a cultural

form without which no human society has existed, will

cease to be in our world [because of illegal file swapping]”).

More importantly, copyright holders at least potentially

have other tools available to reduce piracy and to abate

whatever threat it poses to creative production. As today’s

opinion makes clear, a copyright holder may proceed

against a technology provider where a provable specific

intent to infringe (of the kind the Court describes) is pre-

sent. Ante, at 24 (opinion of the Court). Services like

Grokster may well be liable under an inducement theory.

In addition, a copyright holder has always had the legal

authority to bring a traditional infringement suit against

one who wrongfully copies. Indeed, since September 2003,

the Recording Industry Association of America (RIAA) has

filed “thousands of suits against people for sharing copy-

righted material.” Walker, New Movement Hits Universi-

ties: Get Legal Music, Washington Post, Mar. 17, 2005,

p. E1. These suits have provided copyright holders with

damages; have served as a teaching tool, making clear

that much file sharing, if done without permission, is

16 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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BREYER, J., concurring

unlawful; and apparently have had a real and significant

deterrent effect. See, e.g., L. Rainie, M. Madden, D. Hess,

& G. Mudd, Pew Internet Project and comScore Media

Metrix Data Memo: The state of music downloading

and file-sharing online, pp. 2, 4, 6, 10 (Apr. 2004),

www.pewinternet.org/pdfs/PIP_Filesharing_April_04.pdf

(number of people downloading files fell from a peak of

roughly 35 million to roughly 23 million in the year follow-

ing the first suits; 38% of current downloaders report

downloading fewer files because of the suits); M. Madden

& L. Rainie, Pew Internet Project Data Memo: Music and

video downloading moves beyond P2P, p. 7 (March 2005),

www.pewinternet.org/pdfs/PIP_Filesharing_March05.pdf

(number of downloaders has “inched up” but “continues to

rest well below the peak level”); Groennings, Note, Costs

and Benefits of the Recording Industry’s Litigation

Against Individuals, 20 Berkeley Technology L. J. 571

(2005); but see Evangelista, Downloading Music and

Movie Files is as Popular as Ever, San Francisco Chroni-

cle, Mar. 28, 2005, p. E1 (referring to the continuing “tide

of rampant copyright infringement,” while noting that the

RIAA says it believes the “campaign of lawsuits and public

education has at least contained the problem”).

Further, copyright holders may develop new technologi-

cal devices that will help curb unlawful infringement.

Some new technology, called “digital ‘watermarking’ ” and

“digital fingerprint[ing],” can encode within the file infor-

mation about the author and the copyright scope and date,

which “fingerprints” can help to expose infringers. RIAA

Reveals Method to Madness, Wired News, Aug. 28, 2003,

http://www.wired.com/news/digiwood/0,1412,60222,00.html;

Besek, Anti-Circumvention Laws and Copyright: A Report

from the Kernochan Center for Law, Media and the

Arts, 27 Colum. J. L. & Arts 385, 391, 451 (2004). Other

technology can, through encryption, potentially restrict

users’ ability to make a digital copy. See J. Borland,

Cite as: 545 U. S. ____ (2005) 17

BREYER, J., concurring

Tripping the Rippers, C/net News.com (Sept. 28, 2001),

http://news.com.com/Tripping+the+rippers/2009=1023_3=

273619.html; but see Brief for Bridgemar Services Ltd. as

Amicus Curiae 5–8 (arguing that peer-to-peer service

providers can more easily block unlawful swapping).

At the same time, advances in technology have discour-

aged unlawful copying by making lawful copying (e.g.,

downloading music with the copyright holder’s permission)

cheaper and easier to achieve. Several services now sell

music for less than $1 per song. (Walmart.com, for exam-

ple, charges $0.88 each). Consequently, many consumers

initially attracted to the convenience and flexibility of

services like Grokster are now migrating to lawful paid

services (services with copying permission) where they can

enjoy at little cost even greater convenience and flexibility

without engaging in unlawful swapping. See Wu, When

Code Isn’t Law, 89 Va. L. Rev. 679, 731–735 (2003) (noting

the prevalence of technological problems on unpaid swap-

ping sites); K. Dean, P2P Tilts Toward Legitimacy,

wired.com, Wired News (Nov. 24, 2004), http://

www.wired.com/news/digiwood/0,1412,65836,00.html; M.

Madden & L. Rainie, March 2005 Data Memo, supra, at 6–

7 (percentage of current downloaders who have used paid

services rose from 24% to 43% in a year; number using

free services fell from 58% to 41%).

Thus, lawful music downloading services—those that

charge the customer for downloading music and pay royal-

ties to the copyright holder—have continued to grow and

to produce substantial revenue. See Brief for Internet

Law Faculty as Amici Curiae 5–20; Bruno, Digital Enter-

tainment: Piracy Fight Shows Encouraging Signs (Mar. 5,

2005), available at LEXIS, News Library, Billboard File

(in 2004, consumers worldwide purchased more than 10

times the number of digital tracks purchased in 2003;

global digital music market of $330 million in 2004 ex-

18 METRO-GOLDWYN-MAYER STUDIOS INC. v.

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BREYER, J., concurring

pected to double in 2005); Press Release, Informa Media

Report, supra (global digital revenues will likely exceed $3

billion in 2010); Ashton, [International Federation of the

Phonographic Industry] Predicts Downloads Will Hit the

Mainstream, Music Week, Jan. 29, 2005, p. 6 (legal music

sites and portable MP3 players “are helping transform the

digital music market” into “an everyday consumer experi-

ence”). And more advanced types of non-music-oriented

P2P networks have also started to develop, drawing in

part on the lessons of Grokster.

Finally, as Sony recognized, the legislative option re-

mains available. Courts are less well suited than Con-

gress to the task of “accommodat[ing] fully the varied

permutations of competing interests that are inevitably

implicated by such new technology.” Sony, 464 U. S., at

431; see, e.g., Audio Home Recording Act of 1992, 106 Stat.

4237 (adding 17 U. S. C., ch. 10); Protecting Innovation

and Art While Preventing Piracy: Hearing Before the

Senate Comm. on the Judiciary, 108th Cong., 2d Sess.

(July 22, 2004).

I do not know whether these developments and similar

alternatives will prove sufficient, but I am reasonably

certain that, given their existence, a strong demonstrated

need for modifying Sony (or for interpreting Sony’s stan-

dard more strictly) has not yet been shown. That fact,

along with the added risks that modification (or strict

interpretation) would impose upon technological innova-

tion, leads me to the conclusion that we should maintain

Sony, reading its standard as I have read it. As so read, it

requires affirmance of the Ninth Circuit’s determination of

the relevant aspects of the Sony question.

* * *

For these reasons, I disagree with JUSTICE GINSBURG,

but I agree with the Court and join its opinion.