MGM Studios, Inc. v. Grokster, Ltd.

The copyright infringement case of MGM Studios, Inc. v. Grokster, Ltd. was filed in 2003 by MGM, Metro-Goldwyn-Mayer, Inc., a total of 28 other entertainment companies, against Grokster and Steamcast. Grokster and Steamcast were Internet companies that offered peer-to-peer file sharing. Peer-to-peer file sharing, otherwise known as P2P file sharing, is the act of sharing stored digital information, such as movies, music, documents, and electronic books. This particular movie copyright suit was filed due to the fact that a large number of the files that were being shared on these websites were copyrighted material, some of which belonged to MGM and the other listed entertainment companies.

In response to the copyright infringement case, Grokster argued that if the movie copyright suit were to be found in favor of the plaintiff, this would create the potential grounds for movie copyright organizations to seek damages in a number of previous acts believed to be related to peer-to-peer file sharing and copyright infringement. With this not being the first filed copyright infringement case that Grokster was named in on behalf of MGM, there was a great deal at stake as to what the final decision would forecast for future movie copyright regulations.

The copyright infringement case was originally filed by MGM, along with the 28 entertainment companies, in the United States District Court for the Central District of California. The copyright infringement case was dismissed in 2003, due to its parallels to the Sony Corp. v. Universal City Studios movie copyright case, and its final verdict. In the Sony Corp v. Universal City Studios copyright infringement case, the court had to reach a decision as to the regulation of the VCR.

Movie copyright lawmakers had to decide whether or not VCR manufacturers would be responsible for the actions of consumers that used their product on the basis of potential copyright infringement. In the copyright infringement case of Sony Corp. v. Universal City Studios, the final verdict by the Supreme Court of the United States concluded that the function of VCR recording for individual use executed a person's right to fair use.

The copyright infringement case of MGM Studios, Inc. v. Grokster, Ltd., was then filed by MGM to the United States Court of Appeals for the Ninth Circuit. This second installment of the movie copyright case was dismissed on the basis of the notion that P2P file sharing is a method that is lawfully binding. Nevertheless, it was in 2005 that the United States Supreme Court made the final ruling on the copyright infringement case, declaring that Grokster, Ltd. and Steamcast were liable for their involvement in the P2P file sharing being conducted on their networking sites.

The basis for the final Supreme Court ruling in the MGM Studios, Inc. v. Grokster, Ltd. copyright infringement case was that the court saw the defendants' actions as a copyright infringement by specifically promoting such practice and capability to consumers.

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