With respect to StreamCast, the court noted that the Gnutella technology on which
StreamCast was based was a “true” peer-to-peer network that was even more decentralized than
FastTrack. Users connected to the Gnutella network by contacting another user who was already
connected. The initial connection was usually performed automatically after the user’s computer
contacted one of many publicly available directories of those currently connected to the Gnutella
network. Instead of using supernodes, search requests on the Gnutella network were passed from
user to user until a match was found or the search request expired.^1860
Accordingly, the court concluded that, unlike Napster, neither StreamCast nor Grokster
provided the “site and facilities” for direct infringement. Users connected to their respective
networks, selected files to share, sent searches, and downloaded files, all without material
involvement of the defendants.^1861 “If either Defendant closed their doors and deactivated all
computers within their control, users of their products could continue sharing files with little or
no interruption.”^1862 The defendants therefore did not provide sufficient material contribution to
the infringing acts of users to be liable as contributory infringers.^1863
An analysis of the court’s rulings with respect to vicarious liability may be found in
Section III.C.3(f) below.^1864
On appeal, the Ninth Circuit affirmed.^1865 Turning first to the knowledge prong of
contributory infringement, the Ninth Circuit noted that any examination of contributory
copyright infringement must be guided by the seminal Sony case, under which it is sufficient to
defeat a claim of contributory infringement if the defendant shows that its product is capable of
substantial or commercially significant noninfringing uses.^1866 The court noted that, based on
Sony, it had held in the first appeal in the Napster case 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:
(^1860) Id. at 1041.
(^1861) Id.
(^1862) Id.
(^1863) Id. at 1043. Nor did the provision of technical assistance to their users constitute a material contribution to
infringement, because the technical assistance was rendered only after the alleged infringements too place, was
routine and non-specific in nature. Id. at 1042.
(^1864) In January of 2004, the district court ruled that Sharman Networks could pursue claims against the record labels
and Hollywood studios for copyright infringement and breach of contract based on allegations that, in their
effort to find people sharing files illegally, the labels and studios used unauthorized and unlicensed versions of
the Kazaa software to monitor users of the network. Sharman Networks also claimed that the labels breached
the software license agreement by sending instant message warnings and bogus files through the network. Jon
Healy, “Kazaa Owner Cleared to Sue Record Labels, Movie Studios” (Jan. 23, 2004), available as of Jan. 23,
2004 at http://www.latimes.com/technology/la-fi-kazaa23jan23,1,2476555.story.
(^1865) Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 380 F.3d 1154 (9th Cir. 2004).
(^1866) Id. at 1160-61.