unending infringement outside of the Morpheus system and software, effectively eviscerating the
plaintiffs’ ability to protect their property rights.^1974
The court found that the plaintiffs had no adequate remedy at law because a statutory
recovery for those infringements induced through the Morpheus system would not compensate
the plaintiffs when those same files were subsequently shared outside the Morpheus system. The
balance of hardships tipped in the plaintiffs’ favor because StreamCast would likely engage in
further inducement in the absence of a permanent injunction. Finally, an injunction would serve
the public interest since it would protect the plaintiffs’ copyrights against increased
infringement.^1975
Turning to the scope of the injunction, the court first ruled that the scope should not
extend beyond inducement activities, because inducement was the only form of infringement that
StreamCast had been found liable for. Accordingly, the court rejected the plaintiffs’ proposed
broad wording for the injunction to the extent it would reach activities giving rise to liability
solely under contributory or vicarious liability doctrines, although the court noted that the
injunction could properly extend to copyrighted works of the plaintiffs whether then in existence
or later created.^1976
The court then turned to the most interesting and significant issue relating to the
injunction – whether it should require StreamCast to implement filtering of the plaintiffs’
copyrighted works on its system, and if so, to what extent. StreamCast argued that, under Sony,
its continued distribution of the Morpheus system and software was legal, even without filtering
technology, so long as StreamCast did not engage in any additional actions or statements
promoting infringement, because the system and software were capable of substantial non-
infringing uses.^1977 The court rejected this argument, reasoning that under the Supreme Court’s
Grokster opinion, once acts of encouragement or promotion of infringement through a product or
system have taken place, the further distribution of that product or system can be restricted as
further acts of inducement:
It is important to recognize that the Supreme Court did not impose any strict
timing relationship between specific acts promoting infringements, distribution,
and the direct infringements themselves. For a party to be liable for inducement,
distribution may begin prior to any promotion of infringement, distribution and
promotion can occur at the same time, and most critically, distribution can follow
past promotion. ... As a matter of common sense, a successful inducer will
sometimes have no need to repeat the infringing message ad infinitum. This is(^1974) Id. at 57-62. The court ruled it would make no difference to the irreparable harm analysis if Streamcast’s
inducement was demonstrated to increase the plaintiffs’ sales because, as copyright owners, plaintiffs “have the
exclusive right to decide when and how their material should be reproduced and/or distributed, regardless of
whether their decisions make good business sense.” Id. at 63.
(^1975) Id. at 66-73.
(^1976) Id. at 88,-94.
(^1977) Id. at *100.