Secondary Liability for Inducing Copyright Infringement After MGM v. Grokster: Infringement-Prevention and Product Design
The Supreme Court's treatment of infringement-prevention and product-design omissions in Grokster presents serious issues for lower courts and litigants in copyright cases involving allegations of inducement. The Court's brief discussion does not fit comfortably within the construct of its core holding, which provides that intent to induce may be shown either by clear expression or other affirmative steps to induce infringement, and the decision gives little guidance on the threshold circumstances in which evidence of a product distributor's failure to develop infringement-preventing mechanisms is relevant to intent. Moreover, the Court injected the issue of product design into inducement doctrine without discussing the appropriate substantive standard for determining when failure to employ an alternative design is probative of intent to induce.
Lower courts will need to establish a framework and standards for assessing the relevance and admissibility of product-design evidence, taking into account the overarching goals of copyright law. As the courts struggle to develop these principles, it may be useful to consider analogous or contrasting principles in other areas of copyright law as well as trademark law and products liability law. Given the fundamental nature of these issues, they are likely to have a ripple effect across various stages of litigation, including discovery, summary judgment, and trial.
In the near term, the uncertainty engendered by Grokster's product-design formulation promises to affect distributors of new products not only once they are involved in litigation, but also when they attempt to assess, before a product is distributed, the likelihood of secondary liability for consumers' infringing uses of the product. For emerging companies that create, sell, and market new digital technologies, this sort of uncertainty increases legal risk, which, when coupled with technical and financial risk, can burden innovation.
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Appeared in the December 2005 issue of Journal of Internet Law, Volume 9, Number 6. Copyright © 2005 Cooley Godward LLP. All rights reserved.