control over the user of the product exists.”^2143 Accordingly, the court granted the defendants
summary judgment on the issue of vicarious liability.
On appeal, the Ninth Circuit affirmed.^2144 The Ninth Circuit began by observing that it
had held in the first appeal of the Napster case that the Sony doctrine has no application to
vicarious infringement because vicarious liability was not before the Supreme Court in that case.
Noting further that the issue of direct financial benefit, via advertising revenue, was undisputed,
the court turned its analysis to the prong of right and ability to supervise the infringers.^2145
Noting that the Napster case had found especially important the fact that Napster had an
express policy reserving the right to block infringers’ access to its system, the court contrasted
the instant case in which there was no evidence in the record to establish that either of the
defendants had the ability to block access to individual users. Although Grokster nominally
reserved the right to terminate access, StreamCast did not maintain a licensing agreement with
persons who downloaded Morpheus. Given the lack of a registration and log-in process,
however, even Grokster had no ability to actually terminate access to filesharing functions,
absent a mandatory software upgrade to all users that the particular user refused, or IP address-
blocking attempts (which would not be effective against most users who were utilizing dynamic
IP addresses). The court also noted that none of the communication between the defendants and
users provided a point of access for filtering or searching for infringing files, since infringing
material and index information did not pass through the defendants’ computers.^2146
In the case of StreamCast, shutting down its XML file altogether would not prevent
anyone from using the Gnutella network. In the case of Grokster, its licensing agreement with
Kazaa/Sharman did not give it the ability to mandate that root nodes be shut down. In any event,
the court noted that any alleged ability to shut down operations altogether would be more akin to
the ability to close down an entire swap meet than the ability to exclude individual participants or
to police aisles. The Ninth Circuit noted that the district court had correctly characterized the
copyright owners’ evidence of the right and ability to supervise as little more than a contention
that the software itself could be altered to prevent users from sharing copyrighted files.^2147
In arguing that this ability constitutes evidence of the right and ability to
supervise, the Copyright Owners confuse the right and ability to supervise with
the strong duty imposed on entities that have already been determined to be liable
for vicarious copyright infringement; such entities have an obligation to exercise
their policing powers to the fullest extent, which in Napster’s case included
implementation of new filtering mechanisms. ... But the potential duty a district
court may place on a vicariously liable defendant is not the same as the “ability”(^2143) Id. at 1045-46.
(^2144) Metro-Goldwyn-Mayer v. Grokster, 380 F.3d 1154 (9th 2004).
(^2145) Id. at 1164.
(^2146) Id. at 1165.
(^2147) Id. at 1165-66.