UK: Supreme Court Judgement On Peer-to-Peer Networks Has Implications Across the Globe

The US Supreme Court gave its judgement on a critical question of contributory and vicarious (or secondary) copyright infringement at the end of June 2005. It was decided that the makers of software and the providers of a network, both of which were widely used for copying copyright material, were potentially liable for contributory and vicarious infringement. This judgement may well affect the way that courts across the world decide issues of secondary infringement in the online environment.

The Supreme Court reviewed its earlier landmark decision, known as the Betamax case, and applied it to the Grokster peer-to-peer network and its associated software. This software allowed users to download copyright material (particularly songs and movies) from other network users.

The question was whether the provision of the software and the network, which had legitimate use too, was contributory to the infringement and could therefore be liable for their user's infringement. In the Betamax case, the Court had decided that although the video recorder made by Sony could be used for making infringing copies of TV programmes, it still had a substantial legitimate use. Therefore, its manufacture and sale did not contribute to copyright infringement.

In this case, the Court decided that the scale of infringement, the clear intent or understanding of Grokster to allow copyright infringement by its users, and the benefit directly gained by Grokster through increased advertising revenue by this use, meant that the service was capable of both contributory and vicarious infringement.

In the UK, there is a statutory provision for secondary infringement. In relation to video recorders, the English courts followed the logic of the US Supreme Courts decision in Betamax in their own approach. It seems likely that they will find the latest judgement of the Supreme Court persuasive too.

This means that operators of networks or systems and other suppliers of software are placed in a potentially vulnerable position. If their products or services are used, or have been promoted and marketed by them, in a way that encourages copyright infringement by sharing, downloading or copying, then they may be targets for the film and music industries' litigious wrath