This article summarizes the holdings of the Grokster, Sony, and Napster cases, and discusses how the court differentiated the cases in order to reach a conclusion. The Supreme Court held that Sony was not liable for damages of contributory copyright infringement, ruling that where a product may be used for “substantial” or “commercially significant noninfringing uses,” it was not liable for infringement. On the other hand, Napster was different because it actually provided a network for the infringement to take place. The parties in Groskster eventually came to an agreement in which Grokster agreed to immediately discontinue its former business operations, and agreed to have a judgment and a permanent injunction entered against it in favor of the plaintiffs.
http://internetlaw.uslegal.com/piracy-and-file-sharing/after-napster/grokster/
I think it’s interesting to look back on this controlling precedent which serves as the foundation for the current landscape of IP law and then look at the industry now and realize how much it has changed. I’m curious to see with the current emergence of Spotify, and how it allows you to download any song on your device for a flat rate monthly fee, if any legal action will every be brought by record industries. While record companies are obviously getting a cut from Spotify and similar applications, the music industry has to be losing money– especially because they do not follow the iTunes model, that is, pay per song purchased.