The Supreme Court handed down the Grokster decision this morning. Full background at EFF's MGM v. Grokster page.
The Court remanded for trial on Grokster's infringing intent. The key passages of the unanimous opinion seem to be these. First, the court says that it holds
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,
Yes, footnote 12 does say that,
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.
But the text finds the evidence against Grokster developed so far to be quite strong. So while this isn't a disaster for copyright law, it's not good news for Grokster.
Note that the Ginsburg concurrence, for herself and two other Justices, would set a much tougher standard that would mean you get in trouble for making a popular product regardless of your own conduct:
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.
The Breyer concurrence, also for two others, leans the other way, emphasizing the endurance of the Sony standard.
My bottom line: Grokster loses, but the grounds are narrow enough that — in my best guess — Bittorrent survives.
You can compare this to what the real experts will be saying at the SCOTUSBlog Grokster discussion page.
