OPINION OF THE COURT METRO-GOLDWYN-MAYER STUDIOS INC. V.GROKSTER, LTD. 545 U. S. ____ (2005) 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 distributor 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 affirmative 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-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.[ Footnote 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 including motion picture
studios, recording companies, songwriters, 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).[ Footnote 2 ] MGM sought
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.[ Footnote 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 capacity 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 communicate 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
versions of the Gnutella protocol there are no supernodes. In these
versions, peer computers using the protocol communicate 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.[ Footnote 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.[ Footnote 5 ]
Grokster and StreamCast dispute this figure, raising methodological
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
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 statistical 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 obtain 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.[ Footnote 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. 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 recipients 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; indeed, 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 company “which
is similar to what Napster was,” id ., at 884. It broadcast
banner advertisements to users of other 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 announced 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 original).[ Footnote 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 market of former Napster users is sparser but revealing, for
Grokster launched its own OpenNap system called Swaptor 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 Grokster software. Id. , at 992–993. And
Grokster’s name is an apparent derivative of Napster.

															   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 promotional 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, marketing, 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
numerous than those seeking a free Decameron, and Grokster 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 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 Grokster 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 copyrights, a conclusion not contested on
appeal, but the court nonetheless granted summary judgment in favor
of Grokster and StreamCast as to any liability arising from
distribution 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 distributors 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
infringement. But the court read Sony Corp. of America v. Universal City Studios, Inc. , 464 U. S. 417 (1984), as holding that
distribution of a commercial product capable of substantial
noninfringing uses could not give rise to contributory 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 software, had
no agreed-upon right or current ability to supervise 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 Appeals’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 Ginsburg,
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, Peters, 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 distributors of software
based on its potential for unlawful use, could limit further
development of beneficial technologies. See, e.g. , Lemley
& Reese, Reducing Digital Copyright Infringement Without
Restricting Innovation, 56 Stan. L. Rev. 1345, 1386–1390
(2004); Brief for Innovation Scholars and Economists as Amici
Curiae 15–20; Brief for Emerging Technology Companies as Amici Curiae 19–25; Brief for Intel Corporation as Amicus Curiae 20–22.[ Footnote 8 ]

															   The argument for imposing indirect liability
in this case is, however, a powerful one, given the number of
infringing 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 impossible 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).[ Footnote 9 ] Although
“[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 doctrines
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. Columbia 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. Universal 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 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
library’ ” of recorded programs, id. , at 459
(Blackmun, J., dissenting), neither of these uses was necessarily
infringing, 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
commercially significant noninfringing uses,” we held the
manufacturer 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
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); Aro Mfg. Co. v. Convertible Top
Replacement 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 patent, 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 combination of the patent.” New York Scaffolding Co. v. Whitney , 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-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 presuming 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 misused. It
leaves breathing room for innovation and a vigorous 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
“principally” 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 reproduce public domain works,
and they point to copyright holders who actually encourage copying.
Even if infringement 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
misapplied 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 limitation to mean that whenever a
product is capable of substantial lawful use, the producer can
never be held contributorily 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 infringement 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 alterations 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 displace other theories of secondary
liability, and because we find below that it was error to grant
summary judgment 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 between 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 judgment 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.[ Footnote 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 statements 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 advertising. Thus
at common law a copyright or patent defendant 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 (contributory
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); Thomson-Houston Electric Co. v. Kelsey Electric
R. Specialty Co. , 75 F. 1005, 1007–1008 (CA2 1896) (relying on
advertisements and displays to find defendant’s “willingness … to
aid other persons in any attempts which they may be disposed to
make towards [patent] infringement”); Rumford 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.[ Footnote 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
1963) (demonstrations by sales staff of infringing uses supported
liability for inducement); Haworth Inc. v. Herman
Miller Inc. , 37 USPQ 2d 1080, 1090 (WD Mich. 1994) (evidence
that defendant “demonstrate[d] and recommend[ed] infringing
configurations” of its product could support inducement liability); Sims v. Mack Trucks, Inc. , 459 F. Supp.
1198, 1215 (ED Pa. 1978) (finding inducement 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
distributes a device with the object of promoting its use to
infringe 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. Accordingly, 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 infringing 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 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 undisputed 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 Napster, then under attack in the courts for
facilitating massive 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.

															   In StreamCast’s case, of course,
the evidence just described was supplemented by other unequivocal
indications 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 infringing 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
Grokster and StreamCast, unlike the manufacturer and distributor 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
infringement, 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 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
distribute what were overwhelmingly infringing files, indicate 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 company
attempted to develop filtering tools or other mechanisms to
diminish the infringing activity using their software. While the
Ninth Circuit treated the defendants’ failure to develop such tools
as irrelevant because they lacked an independent duty to monitor
their users’ activity, we think this evidence underscores
Grokster’s and StreamCast’s intentional facilitation of their
users’ infringement.[ Footnote
12 ]

															   Third, there is a further complement to the
direct evidence of unlawful objective. It is useful to recall that
StreamCast and Grokster make money by selling advertising 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
distributors, the commercial sense of their enterprise turns on
high-volume use, which the record shows is infringing.[ Footnote 13 ] 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 judgment requests. Although an exact
calculation of infringing use, as a basis for a claim of damages,
is subject to dispute, 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 balance 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 consequent
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 infringement 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, reconsideration 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. Footnote 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 bandwidth 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. Footnote 2 The studios and recording companies and the
songwriters and music publishers filed separate suits against the
defendants that were consolidated by the District Court. Footnote 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. Footnote 4 There is some evidence that both Grokster and
StreamCast previously operated supernodes, which compiled indexes
of files available on all of the nodes connected to them. This
evidence, pertaining to previous versions of the defendants’
software, is not before us and would not affect our conclusions in
any event. Footnote 5 By comparison, evidence introduced by the
plaintiffs in A & M Records, Inc. v. Napster,
Inc. , 239 F. 3d 1004 (CA9 2001), showed that 87% of files
available on the Napster filesharing network were copyrighted, id. , at 1013. Footnote 6 The Grokster founder contends that in
answering these e-mails he often did not read them fully. App. 77,
769. Footnote 7 The record makes clear that StreamCast
developed these promotional 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. Footnote 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 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., dissenting); 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. Footnote 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
infringement 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 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 inducement theory, there is no need to analyze
separately MGM’s vicarious liability theory. Footnote 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). Footnote 11 Inducement has been codified in patent law. Ibid . Footnote 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. Footnote 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 infringement or assisted … known
acts of infringement.” Brief for Respondents 14; see also id. , at 34. This contention misapprehends the basis 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). GINSBURG, J., CONCURRING METRO-GOLDWYN-MAYER STUDIOS INC. V.GROKSTER, LTD. 545 U. S. ____ (2005_) 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 misapplied, 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
infringement. On neither score was summary judgment for Grokster
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 jurisprudence
may be predicated on actively encouraging (or inducing)
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 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 distribution of a product not “suitable for substantial
noninfringing 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
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.” Sony , 464 U. S., at 442. “Accordingly,” the
Court held, “the sale of copying equipment, like the sale of other
articles of commerce, does not constitute contributory infringement
if the product is widely used for legitimate, unobjectionable
purposes. Indeed, it need merely be capable of substantial
noninfringing uses.” Ibid. Thus, to resolve the Sony case, the Court explained, it had to determine
“whether the Betamax is capable of commercially significant
noninfringing 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 television
programs in the home ( i.e. , recording a broadcast 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 satisfie[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 significant.” Ibid.[ Footnote 1 ] Further development was
left for later days and cases.

															   The Ninth Circuit went astray, I will endeavor
to explain, 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 noninfringing uses.” 380
F. 3d, at 1162.[ Footnote
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 … .”). 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 declarations
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’
software,” 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 authorized 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 distribution of its
trialware software through the Gnutella and FastTrack Networks.”);
Decl. of Patricia D. Hoekman ¶¶3–4, id., at 169–170
(search on Morpheus for “President Bush speeches” found several
video recordings, searches for “Declaration of Independence” and
“Bible” found various 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
advantages over alternate online distribution technologies.”).
Compare Decl. of Brewster Kahle ¶20, id., at 142 (“Those
who download the Prelinger films … are entitled to redistribute
those files, and the Archive welcomes their redistribution 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 Morpheus, Grokster, or KaZaA). Compare also
Decl. of Richard Prelinger ¶17, id., at 147 (“[W]e welcome
further redistribution of the Prelinger films … by individuals
using peer-to-peer software products like Morpheus, KaZaA and
Grokster.”), with Deposition of Richard Prelinger, id., at
410–411 (Oct. 1, 2002) (“Q. What is your understanding 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 Prelinger 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 software for infringement.[ Footnote 3 ]

															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, overwhelmingly 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 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.[ Footnote 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. Footnote 1 Justice Breyer finds in Sony Corp. of
America v. Universal City Studios, 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
symbolic—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 noninfringing as well as infringing
uses, some estimate of the respective magnitudes of these uses is
necessary for a finding of contributory infringement. … 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
noninfringing 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 category, “quite
beyond the circumstances to which the case applied.” Ante ,
at 16. Footnote 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. Footnote 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. 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. Footnote 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. BREYER, J., CONCURRING METRO-GOLDWYN-MAYER STUDIOS INC. V.GROKSTER, LTD. 545 U. S. ____ (2005) 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, however, take up
the Sony question: whether Grokster’s product 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 Grokster’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 considered 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 non infringing purposes, such as recording for
later viewing (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 commerce” doctrine, ibid. , under which a
distributor of a product is not liable for patent infringement by
its customers unless that product is “unsuited for any commercial
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 articles of commerce, does not
constitute contributory infringement if the product is widely used
for legitimate, unobjectionable purposes. Indeed , it
need merely be capable of substantial 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 noninfringing 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 producers 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 plaintiffs—not a large class of content providers as in
this case—owned only a small percentage of the total available un authorized 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 representative. 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’
Neighborhood, a widely watched children’s program. Id ., at
445. 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,” indicated that these circumstances alone constituted
a sufficient basis for rejecting the imposition of secondary
liability. 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
finding separately that, in any event, un authorized 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 product is capable of substantial or
commercially significant noninfringing uses. Id ., at 442.
For one thing, petitioners’ (hereinafter MGM) own expert declared
that 75% of current 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, 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 thousands 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 authorized and public
domain Project Gutenberg eBooks are made available” on Grokster.
Project Gutenberg “welcomes 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 segments
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 survive summary
judgment that could plausibly demonstrate a significant
quantitative difference. See ante , at 4 (opinion of the
Court); see also Brief for Motion Picture Studio and Recording
Company Petitioners i (referring to “at least 90% of the total use
of the services”); but see ante , at 6–7, n. 3
(Ginsburg, J., concurring). To be sure, in quantitative terms these
uses account for only a small percentage of the total number of
uses of Grokster’s product. But the same was true in Sony ,
which characterized the relatively 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 noninfringing 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
legitimate uses over time. See ibid . (noting a
“significant potential 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
copyrighted material. As more and more uncopyrighted information 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).

															   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 naturally 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 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
development 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 infringe” 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 predominant,
and therefore provided no analysis of Sony ’s boundaries);
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 Communication Corp. v. Network Productions,
Inc. , 902 F. 2d 829, 842–847 (CA11 1990) (same); Vault Corp. v. Quaid Software, Ltd. , 847
F. 2d 255, 262 (CA5 1988) (same); cf. Dynacore 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 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 noninfringing uses would develop over time), with Sony , 464 U. S., at 442–447 (basing conclusion as to the
likely existence 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 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.
Thus, to determine whether modification, or a strict
interpretation, 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 liability as they bring valuable new technologies to
market. Sony’s rule is clear. That clarity allows those who develop new products that are capable
of substantial noninfringing 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
specifically intended for—copyright infringement, deterrence 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 themselves 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 descrambler 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. 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 several
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 perhaps 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 modified Sony rule (or a strict
interpretation) would significantly weaken the law’s ability to
protect new technology. Justice Ginsburg’s approach would require
defendants 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. Inventors 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 noninfringing 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
commercial 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 most difficult of the three. I do not doubt that a
more intrusive Sony test would generally provide greater
revenue 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 different 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 creation,
production, or distribution of the technology an exceptional 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 serious 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 copyrighted
material from infringement. The Constitution itself stresses the
vital role that copyright plays in advancing the “useful Arts.”
Art. I, §8, cl. 8. No one disputes that “reward to the author
or artist serves to induce release 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 infringement);
§1961(1)(B) (copyright infringement can be a predicate act under
the Racketeer Influenced and Corrupt Organizations Act);
§1956(c)(7)(D) (money laundering includes the receipt of proceeds
from copyright infringement). 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 available 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
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
substantial. 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 sharing is a minor
threat or no threat at all to creative industries); 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 distribution … . [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 present. 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 copyrighted
material.” Walker, New Movement Hits Universities: 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 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 following 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 Chronicle, 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
technological devices that will help curb unlawful infringement.
Some new technology, called “digital ‘watermarking’ ” and
“digital fingerprint[ing],” can encode within the file information
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, 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
discouraged 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 example,
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 swapping 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 royalties 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 Entertainment: 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
expected 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 experience”). 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 remains available. Courts are less well suited
than Congress 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
standard more strictly) has not yet been shown. That fact, along
with the added risks that modification (or strict interpretation)
would impose upon technological innovation, 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.