Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.

METRO-GOLDWYN-MAYER STUDIOS INC. et al. v.

GROKSTER, LTD., et al.

certiorari to the united states court of appeals for the ninth circuit

No. 04–480. Argued March 29, 2005—Decided June 27, 2005

Respondent companies distribute free software that allows computer users to share electronic files through peer-to-peer networks, so called because the computers communicate directly with each other, not through central servers. Although such networks can be used to share any type of digital file, recipients of respondents’ software have mostly used them to share copyrighted music and video files without authoriza­ tion. Seeking damages and an injunction, a group of movie studios and other copyright holders (hereinafter MGM) sued respondents for their users’ copyright infringements, alleging that respondents knowingly and intentionally distributed their software to enable users to infringe copyrighted works in violation of the Copyright Act.

Discovery revealed that billions of files are shared across peer-to-peer networks each month. Respondents are aware that users employ their software primarily to download copyrighted files, although the decen­ tralized networks do not reveal which files are copied, and when. Re­ spondents have sometimes learned about the infringement directly when users have e-mailed questions regarding copyrighted works, and respondents have replied with guidance. Respondents are not merely passive recipients of information about infringement. The record is re­ plete with evidence that when they began to distribute their free soft­ ware, each of them clearly voiced the objective that recipients use the software to download copyrighted works and took active steps to en­ courage infringement. After the notorious file-sharing service, Nap­ ster, was sued by copyright holders for facilitating copyright infringe­ ment, both respondents promoted and marketed themselves as Napster alternatives. They receive no revenue from users, but, instead, gener­ ate income by selling advertising space, then streaming the advertising to their users. As the number of users increases, advertising opportu­ nities are worth more. There is no evidence that either respondent made an effort to filter copyrighted material from users’ downloads or otherwise to impede the sharing of copyrighted files.

While acknowledging that respondents’ users had directly infringed MGM’s copyrights, the District Court nonetheless granted respondents summary judgment as to liability arising from distribution of their soft­

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Syllabus It read Sony Corp. of America v. ware. The Ninth Circuit affirmed.

Universal City Studios, Inc., 464 U. S. 417, as holding that the distribu­ tion of a commercial product capable of substantial noninfringing uses could not give rise to contributory liability for infringement unless the distributor had actual knowledge of specific instances of infringement and failed to act on that knowledge. Because the appeals court found respondents’ software to be capable of substantial noninfringing uses and because respondents had no actual knowledge of infringement owing to the software’s decentralized architecture, the court held that they were not liable.

It also held that they did not materially contrib­ ute to their users’ infringement because the users themselves searched for, retrieved, and stored the infringing files, with no involvement by respondents beyond providing the software in the first place. Finally, the court held that respondents could not be held liable under a vicari­ ous infringement theory because they did not monitor or control the software’s use, had no agreed-upon right or current ability to supervise its use, and had no independent duty to police infringement.

Held: One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, going beyond mere distribution with knowledge of third-party action, is liable for the resulting acts of in­ fringement by third parties using the device, regardless of the device’s lawful uses. Pp. 928–941.

(a) The tension between the competing values of supporting creativ­ ity through copyright protection and promoting technological innovation by limiting infringement liability is the subject of this case. Despite offsetting considerations, the argument for imposing indirect liability here is powerful, given the number of infringing downloads that occur daily using respondents’ software. When a widely shared product is used to commit infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, so that the only practical alternative is to go against the device’s distributor for secondary liability on a theory of contributory or vicarious infringement.

One infringes contributorily by intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting from direct infringement while declining to exercise the right to stop or limit it.

Although “[t]he Copyright Act does not expressly render anyone liable for [another’s] infringement,” Sony, 464 U. S., at 434, these secondary liability doctrines emerged from common law principles and are well established in the law, e. g., id., at 486. Pp. 928–931.

(b) Sony addressed a claim that secondary liability for infringement can arise from the very distribution of a commercial product. There,

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copyright holders sued Sony, the manufacturer of videocassette record­ ers, claiming that it was contributorily liable for the infringement that occurred when VCR owners taped copyrighted programs. The evi­ dence showed that the VCR’s principal use was “time-shifting,” i. e., taping a program for later viewing at a more convenient time, which the Court found to be a fair, noninfringing use. 464 U. S., at 423–424.

Moreover, there was no evidence that Sony had desired to bring about taping in violation of copyright or taken active steps to increase its Id., at 438. On those facts, the only con­ profits from unlawful taping. ceivable basis for liability was on a theory of contributory infringement Id., at 439. Because the VCR was through distribution of a product. “capable of commercially significant noninfringing uses,” the Court held Id., at 442. This theory reflected patent that Sony was not liable. law’s traditional staple article of commerce doctrine that distribution of a component of a patented device will not violate the patent if it is 35 U. S. C. § 271(c). The doctrine ab­ suitable for use in other ways. solves the equivocal conduct of selling an item with lawful and unlawful uses and limits liability to instances of more acute fault.

In this case, the Ninth Circuit misread Sony to mean that when a product is capable of substantial lawful use, the producer cannot be held contributorily lia­ ble for third parties’ infringing use of it, even when an actual purpose to cause infringing use is shown, unless the distributors had specific knowledge of infringement at a time when they contributed to the in­ fringement and failed to act upon that information. Sony did not dis­ place other secondary liability theories. Pp. 931–934.

(c) Nothing in Sony requires courts to ignore evidence of intent to promote infringement if such evidence exists.

It was never meant to foreclose rules of fault-based liability derived from the common law.

464 U. S., at 439. Where evidence goes beyond a product’s characteris­ tics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement, Sony’s staple-article rule will not preclude liability. At common law a copy­ right or patent defendant who “not only expected but invoked [infring­ ing use] by advertisement” was liable for infringement. Kalem Co. v.

Harper Brothers, 222 U. S. 55, 62–63. The rule on inducement of in­ fringement as developed in the early cases is no different today. Evi­ dence of active steps taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage in an infring­ ing use, shows an affirmative intent that the product be used to infringe, and overcomes the law’s reluctance to find liability when a defendant merely sells a commercial product suitable for some lawful use. A rule that premises liability on purposeful, culpable expression and conduct

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does nothing to compromise legitimate commerce or discourage innova­ tion having a lawful promise. Pp. 934–937.

(d) On the record presented, respondents’ unlawful objective is un­ mistakable. The classic instance of inducement is by advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations. MGM argues persuasively that such a message is shown here. Three features of the evidence of intent are particularly notable. First, each of the respondents showed itself to be aiming to satisfy a known source of demand for copyright infringement, the mar­ ket comprising former Napster users. Respondents’ efforts to supply services to former Napster users indicate a principal, if not exclusive, intent to bring about infringement. Second, neither respondent at­ tempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software. While the Ninth Circuit treated that failure as irrelevant because respondents lacked an inde­ pendent duty to monitor their users’ activity, this evidence underscores their intentional facilitation of their users’ infringement. Third, re­ spondents make money by selling advertising space, then by directing ads to the screens of computers employing their software. The more their software is used, the more ads are sent out and the greater the advertising revenue. Since the extent of the software’s use determines the gain to the distributors, the commercial sense of their enterprise turns on high-volume use, which the record shows is infringing. This evidence alone would not justify an inference of unlawful intent, but its import is clear in the entire record’s context. Pp. 937–940.

(e) In addition to intent to bring about infringement and distribution of a device suitable for infringing use, the inducement theory requires evidence of actual infringement by recipients of the device, the software in this case. There is evidence of such infringement on a gigantic scale.

Because substantial evidence supports MGM on all elements, summary judgment for respondents was error. On remand, reconsideration of MGM’s summary judgment motion will be in order. Pp. 940–941.

380 F. 3d 1154, vacated and remanded.

Souter, J., delivered the opinion for a unanimous Court. Ginsburg, J., filed a concurring opinion, in which Rehnquist, C. J., and Kennedy, J., joined, post, p. 942. Breyer, J., filed a concurring opinion, in which Ste­ vens and O’Connor, JJ., joined, post, p. 949.

Donald B. Verrilli, Jr., argued the cause for petitioners.

With him on the briefs for the motion picture studio and recording company petitioners were Ian Heath Gershengorn,

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Counsel William M. Hohengarten, Steven B. Fabrizio, Thomas J.

Perrelli, Matthew J. Oppenheim, David E. Kendall, Thomas

G. Hentoff, Kenneth W. Starr, Russell J. Frackman, George

M. Borkowski, Robert M. Schwartz, Gregory P. Goeckner,

Dean C. Garfield, Elaine J. Goldenberg, Matthew Hersh, Ste­ ven M. Marks, and Stanley Pierre-Louis. Carey R. Ramos, Peter L. Felcher, Aidan Synnott, Theodore K. Cheng, Kelli

lisher petitioners.

Acting Solicitor General Clement argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Assistant Attorney General Keisler, Deputy Solicitor General Hungar, Douglas H. Hallward- Driemeier, Anthony A. Yang, David O. Carson, and John

M. Whealan.

Richard G. Taranto argued the cause for respondents.

With him on the brief were H. Bartow Farr III, Cindy A.

Cohn, Fred Von Lohmann, Michael H. Page, Mark A. Lem­ ley, Charles S. Baker, and Matthew A. Neco.*

*Briefs of amici curiae urging reversal were filed for the State of Utah et al. by Mark Shurtleff, Attorney General of Utah, and by the Attorneys General for their respective jurisdictions as follows: Troy King of Ala­ bama, Gregg Renkes of Alaska, Terry Goddard of Arizona, Mike Beebe of Arkansas, M. Jane Brady of Delaware, Charles J. Crist, Jr., of Florida, Thurbert E. Baker of Georgia, Douglas B. Moylan of Guam, Mark J. Ben­ nett of Hawaii, Lawrence G. Wasden of Idaho, Lisa Madigan of Illinois, Steve Carter of Indiana, Phill Kline of Kansas, Gregory D. Stumbo of Kentucky, Charles C. Foti, Jr., of Louisiana, Thomas F. Reilly of Massa­ chusetts, Michael A. Cox of Michigan, Mike Hatch of Minnesota, Jim Hood of Mississippi, Jeremiah W. (Jay) Nixon of Missouri, Mike McGrath of Montana, Jon Bruning of Nebraska, Brian Sandoval of Nevada, Peter C.

Harvey of New Jersey, Patricia A. Madrid of New Mexico, Roy Cooper of North Carolina, Wayne Stenehjem of North Dakota, Jim Petro of Ohio,

W. A. Drew Edmondson of Oklahoma, Thomas W. Corbett, Jr., of Pennsyl­

vania, Patrick Lynch of Rhode Island, Henry McMaster of South Carolina, Lawrence E. Long of South Dakota, Paul G. Summers of Tennessee, Greg Abbott of Texas, William H. Sorrell of Vermont, Jerry Kilgore of Virginia,

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Opinion of the Court Justice Souter delivered the opinion of the Court.

The question is under what circumstances the distributor of a product capable of both lawful and unlawful use is liable

Darrell V. McGraw, Jr., of West Virginia, and Peg Lautenschlager of Wis­ consin; for the American Federation of Musicians of the United States and Canada et al. by George H. Cohen, Patricia Polach, and Laurence Gold; for the American Society of Composers, Authors and Publishers et al. by

Americans for Tax Reform by Carter G. Phillips, Alan Charles Raul, Jay

T. Jorgensen, and Eric A. Shumsky; for the Commissioner of Baseball

et al. by Robert Alan Garrett and Hadrian R. Katz; for Defenders of Property Rights by Theodore B. Olson, Thomas H. Dupree, Jr., Matthew

D. McGill, Nancie G. Marzulla, and Roger Marzulla; for International

Rights Owners by Christopher Wolf; for Kids First Coalition et al. by Viet D. Dinh; for Law Professors et al. by James Gibson; for Macrovision Corp. by Geoffrey L. Beauchamp, Kelly G. Huller, and James H. Salter; for Napster, LLC, et al. by Barry I. Slotnick; for the National Academy of Recording Arts & Sciences, Inc., et al. by Jon A. Baumgarten and Jay

Bride, Jane E. Mago, Benjamin F. P. Ivins, and Jerianne Timmerman; for the National Association of Recording Merchandisers by Alan R. Ma­ lasky and Melanie Martin-Jones; for the Progress & Freedom Foundation by James V. DeLong; for the Video Software Dealers Association by John

T. Mitchell; and for Professor Peter S. Menell et al. by Mr. Menell, pro se.

Briefs of amici curiae urging affirmance were filed for Altnet, Inc., by Roderick G. Dorman; for the American Civil Liberties Union et al. by Christopher A. Hansen, Steven R. Shapiro, Sharon M. McGowan, Ann Brick, and Jordan C. Budd; for the American Conservative Union et al. by David Post; for the Cellular Telecommunications & Internet Associa­ tion et al. by Andrew G. McBride, Joshua S. Turner, Michael Altschul, James W. Olson, Frank L. Politano, Laura Kaster, Jeffrey A. Rackow, Grier C. Raclin, Michael Standard, John Thorne, Sarah B. Deutsch, and Paul J. Larkin, Jr.; for the Consumer Electronics Association et al. by Bruce G. Joseph and Scott E. Bain; for the Consumer Federation of America et al. by Peter Jaszi; for the Distributed Computing Industry Association by Mr. Dorman; for the Eagle Forum Education & Legal De­ fense Fund by Andrew L. Schlafly and Karen B. Tripp; for the Free Soft­ ware Foundation et al. by Eben Moglen; for Intel Corp. by James M.

Burger and Jonathan D. Hart; for Internet Law Faculty by William W.

Fisher III and Jonathan Zittrain; for Law Professors by J. Glynn Lun­ ney, Jr.; for the National Association of Shareholder and Consumer Attor­

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for acts of copyright infringement by third parties using the product. We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.

Respondents, Grokster, Ltd., and StreamCast Networks, Inc., defendants in the trial court, distribute free software products that allow computer users to share electronic files through peer-to-peer networks, so called because users’ com­ puters communicate directly with each other, not through

neys by Kevin P. Roddy and Matthew E. Van Tine; for Sixty Intellectual Property and Technology Law Professors et al. by Deirdre K. Mulligan and Pamela Samuelson; for Sovereign Artists et al. by James R.

Wheaton; for Computer Science Professor Harold Abelson et al. by James

S. Tyre; for Professor Edward Lee et al. by Mr. Lee, pro se; for Charles

Nesson by Mr. Nesson, pro se; and for Malla Pollack et al. by Ms. Pollack, pro se.

Briefs of amici curiae were filed for the American Intellectual Property Law Association by Rick D. Nydegger and Melvin C. Garner; for Audible Magic Corp. et al. by Bruce V. Spiva and Jeremy H. Stern; for Bridgemar Services, Ltd. d/ b/a iMesh.com by Jeffrey A. Kimmel; for the Business Software Alliance by E. Edward Bruce and Robert A. Long, Jr.; for Cre­ ative Commons by Lawrence Lessig; for the Digital Media Association et al. by Lawrence Robbins, Alan Untereiner, Markham C. Erickson, and Jerry Berman; for Emerging Technology Companies by Michael Traynor and Matthew D. Brown; for IEEE-USA by Matthew J. Conigliaro, An­ drew C. Greenberg, Joseph H. Lang, Jr., and Daniel E. Fisher; for Innova­ tion Scholars and Economists by Laurence F. Pulgram; for the Intellectual Property Owners Association by James H. Pooley; for Media Studies Pro­ fessors by Roy I. Liebman; for the National Venture Capital Association by Michael K. Kellogg, Mark L. Evans, and David L. Schwarz; for Shar­ man Networks Limited by Mr. Dorman; for SNOCAP, Inc., by Joel W.

Nomkin; for Kenneth J. Arrow et al. by David A. Strauss; for Lee A.

Hollaar by Lloyd W. Sadler; for U. S. Senator Patrick Leahy et al. by Mr. Leahy, pro se, and Senator Orrin G. Hatch, pro se; and for Felix Oberholzer-Gee et al. by Carl H. Settlemyer III and Arnold P. Lutzker.

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central servers. The advantage of peer-to-peer networks over information networks of other types shows up in their substantial and growing popularity. Because they need no central computer server to mediate the exchange of informa­ tion or files among users, the high-bandwidth communica­ tions capacity for a server may be dispensed with, and the need for costly server storage space is eliminated. Since copies of a file (particularly a popular one) are available on many users’ computers, file requests and retrievals may be faster than on other types of networks, and since file ex­ changes do not travel through a server, communications can take place between any computers that remain connected to the network without risk that a glitch in the server will dis­ able the network in its entirety. Given these benefits in se­ curity, cost, and efficiency, peer-to-peer networks are em­ ployed to store and distribute electronic files by universities, government agencies, corporations, and libraries, among others.1

Other users of peer-to-peer networks include individual re­ cipients of Grokster’s and StreamCast’s software, and al­ though the networks that they enjoy through using the soft­ ware can be used to share any type of digital file, they have prominently employed those networks in sharing copy­ righted music and video files without authorization. A group of copyright holders (MGM for short, but including motion picture studios, recording companies, songwriters, and music publishers) sued Grokster and StreamCast for their users’ copyright infringements, alleging that they

1 Peer-to-peer networks have disadvantages as well. Searches on peer-to-peer networks may not reach and uncover all available files be­ cause search requests may not be transmitted to every computer on the network. There may be redundant copies of popular files. The creator of the software has no incentive to minimize storage or bandwidth con­ sumption, the costs of which are borne by every user of the network.

Most relevant here, it is more difficult to control the content of files avail­ able for retrieval and the behavior of users.

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knowingly and intentionally distributed their software to en­ able users to reproduce and distribute the copyrighted works in violation of the Copyright Act, 17 U. S. C. § 101 et seq.

(2000 ed. and Supp. II).2 MGM sought damages and an injunction.

Discovery during the litigation revealed the way the soft­ ware worked, the business aims of each defendant company, and the predilections of the users. Grokster’s eponymous software employs what is known as FastTrack technology, a protocol developed by others and licensed to Grokster.

StreamCast distributes a very similar product except that its software, called Morpheus, relies on what is known as Gnutella technology.3 A user who downloads and installs either software possesses the protocol to send requests for files directly to the computers of others using software com­ patible with FastTrack or Gnutella. On the FastTrack net­ work opened by the Grokster software, the user’s request goes to a computer given an indexing capacity by the soft­ ware and designated a supernode, or to some other computer with comparable power and capacity to collect temporary indexes of the files available on the computers of users connected to it. The supernode (or indexing computer) searches its own index and may communicate the search re­ quest to other supernodes.

If the file is found, the super­ node discloses its location to the computer requesting it, and the requesting user can download the file directly from the computer located. The copied file is placed in a designated sharing folder on the requesting user’s computer, where it is available for other users to download in turn, along with any other file in that folder.

2 The studios and recording companies and the songwriters and music publishers filed separate suits against the defendants that were consoli­ dated by the District Court.

3 Subsequent versions of Morpheus, released after the record was made in this case, apparently rely not on Gnutella but on a technology called Neonet. These developments are not before us.

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In the Gnutella network made available by Morpheus, the process is mostly the same, except that in some versions of the Gnutella protocol there are no supernodes.

In these versions, peer computers using the protocol communicate di­ rectly with each other. When a user enters a search request into the Morpheus software, it sends the request to comput­ ers connected with it, which in turn pass the request along to other connected peers. The search results are communi­ cated to the requesting computer, and the user can download desired files directly from peers’ computers. As this de­ scription indicates, Grokster and StreamCast use no servers to intercept the content of the search requests or to mediate the file transfers conducted by users of the software, there being no central point through which the substance of the communications passes in either direction.4

Although Grokster and StreamCast do not therefore know when particular files are copied, a few searches using their software would show what is available on the networks the software reaches. MGM commissioned a statistician to con­ duct a systematic search, and his study showed that nearly 90% of the files available for download on the FastTrack sys­ tem were copyrighted works.5 Grokster and StreamCast dispute this figure, raising methodological problems and ar­ guing that free copying even of copyrighted works may be authorized by the rightholders. They also argue that poten­ tial noninfringing uses of their software are significant in kind, even if infrequent in practice. Some musical perform­ ers, for example, have gained new audiences by distributing

4 There is some evidence that both Grokster and StreamCast previously operated supernodes, which compiled indexes of files available on all of the nodes connected to them. This evidence, pertaining to previous ver­ sions of the defendants’ software, is not before us and would not affect our conclusions in any event.

5 By comparison, evidence introduced by the plaintiffs in A&M Records, Inc. v. Napster, Inc., 239 F. 3d 1004 (CA9 2001), showed that 87% of files available on the Napster file-sharing network were copyrighted, id., at 1013.

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their copyrighted works for free across peer-to-peer net­ works, and some distributors of unprotected content have used peer-to-peer networks to disseminate files, Shakespeare being an example.

Indeed, StreamCast has given Morpheus users the opportunity to download the briefs in this very case, though their popularity has not been quantified.

As for quantification, the parties’ anecdotal and statistical evidence entered thus far to show the content available on the FastTrack and Gnutella networks does not say much about which files are actually downloaded by users, and no one can say how often the software is used to obtain copies of unprotected material. But MGM’s evidence gives reason to think that the vast majority of users’ downloads are acts of infringement, and because well over 100 million copies of the software in question are known to have been down­ loaded, and billions of files are shared across the FastTrack and Gnutella networks each month, the probable scope of copyright infringement is staggering.

Grokster and StreamCast concede the infringement in most downloads, Brief for Respondents 10, n. 6, and it is un­ contested that they are aware that users employ their soft­ ware primarily to download copyrighted files, even if the de­ centralized FastTrack and Gnutella networks fail to reveal which files are being copied, and when. From time to time, moreover, the companies have learned about their users’ in­ fringement directly, as from users who have sent e-mail to each company with questions about playing copyrighted movies they had downloaded, to whom the companies have responded with guidance.6 App. 559–563, 808–816, 939–954.

And MGM notified the companies of 8 million copyrighted files that could be obtained using their software.

Grokster and StreamCast are not, however, merely pas­ sive recipients of information about infringing use. The rec­ ord is replete with evidence that from the moment Grokster

6 The Grokster founder contends that in answering these e-mails he often did not read them fully. App. 77, 769.

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and StreamCast began to distribute their free software, each one clearly voiced the objective that recipients use it to download copyrighted works, and each took active steps to encourage infringement.

After the notorious file-sharing service, Napster, was sued by copyright holders for facilitation of copyright infringe­ ment, A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896 (ND Cal. 2000), aff ’d in part, rev’d in part, 239 F. 3d 1004 (CA9 2001), StreamCast gave away a software program of a kind known as OpenNap, designed as compatible with the Napster program and open to Napster users for downloading files from other Napster and OpenNap users’ computers.

Evidence indicates that “[i]t was always [StreamCast’s] in­ tent to use [its OpenNap network] to be able to capture email addresses of [its] initial target market so that [it] could pro­ mote [its] StreamCast Morpheus interface to them,” App.

861; indeed, the OpenNap program was engineered “ ‘to le­ verage Napster’s 50 million user base,’ ” id., at 746.

StreamCast monitored both the number of users down­ loading its OpenNap program and the number of music files Id., at 859, 863, 866.

It also used the re­ they downloaded. sulting OpenNap network to distribute copies of the Mor­ Id., at pheus software and to encourage users to adopt it.

861, 867, 1039.

Internal company documents indicate that StreamCast hoped to attract large numbers of former Nap­ ster users if that company was shut down by court order or otherwise, and that StreamCast planned to be the next Nap­ Id., at 861. A kit developed by StreamCast to be de­ ster. livered to advertisers, for example, contained press articles about StreamCast’s potential to capture former Napster users, id., at 568–572, and it introduced itself to some poten­ tial advertisers as a company “which is similar to what Nap­ ster was,” id., at 884.

It broadcast banner advertisements to users of other Napster-compatible software, urging them Id., at 586. An internal e-mail from to adopt its OpenNap. a company executive stated: “ ‘We have put this network in

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place so that when Napster pulls the plug on their free service . . . or if the Court orders them shut down prior to that . . . we will be positioned to capture the flood of their 32 million users that will be actively looking for an alterna­ tive.’ ”

Id., at 588–589, 861.

Thus, StreamCast developed promotional materials to market its service as the best Napster alternative. One proposed advertisement read: “Napster Inc. has announced that it will soon begin charging you a fee. That’s if the courts don’t order it shut down first. What will you do to Id., at 897. Another proposed ad touted get around it?” StreamCast’s software as the “#1 alternative to Napster” . and asked “[w]hen the lights went off at Napster .

Id., at 836 (ellipsis in original).7 where did the users go?” StreamCast even planned to flaunt the illegal uses of its soft­ ware; when it launched the OpenNap network, the chief tech­ nology officer of the company averred that “[t]he goal is to get in trouble with the law and get sued.

It’s the best way to get in the new[s].” Id., at 916.

.

The evidence that Grokster sought to capture the market of former Napster users is sparser but revealing, for Grok­ ster launched its own OpenNap system called Swaptor and inserted digital codes into its Web site so that computer users using Web search engines to look for “Napster” or “[f]ree file sharing” would be directed to the Grokster Web Id., site, where they could download the Grokster software. at 992–993. And Grokster’s name is an apparent derivative of Napster.

StreamCast’s executives monitored the number of songs by certain commercial artists available on their networks, and an internal communication indicates they aimed to have a larger number of copyrighted songs available on their net­

7 The record makes clear that StreamCast developed these promotional materials but not whether it released them to the public. Even if these advertisements were not released to the public and do not show encour­ agement to infringe, they illuminate StreamCast’s purposes.

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Id., at 868. The works than other file-sharing networks. point, of course, would be to attract users of a mind to in­ fringe, just as it would be with their promotional materials developed showing copyrighted songs as examples of the Id., at 848. kinds of files available through Morpheus.

Morpheus in fact allowed users to search specifically for “Top 40” songs, id., at 735, which were inevitably copyrighted.

Similarly, Grokster sent users a newsletter promoting its ability to provide particular, popular copyrighted materials.

Brief for Motion Picture Studio and Recording Company Petitioners 7–8.

In addition to this evidence of express promotion, market­ ing, and intent to promote further, the business models employed by Grokster and StreamCast confirm that their principal object was use of their software to download copy­ righted works. Grokster and StreamCast receive no reve­ nue from users, who obtain the software itself for nothing.

Instead, both companies generate income by selling advertis­ ing space, and they stream the advertising to Grokster and Morpheus users while they are employing the programs.

As the number of users of each program increases, advertis­ ing opportunities become worth more. Cf. App. 539, 804.

While there is doubtless some demand for free Shakespeare, the evidence shows that substantive volume is a function of free access to copyrighted work. Users seeking Top 40 songs, for example, or the latest release by Modest Mouse, are certain to be far more numerous than those seeking a free Decameron, and Grokster and StreamCast translated that demand into dollars.

Finally, there is no evidence that either company made an effort to filter copyrighted material from users’ downloads or otherwise impede the sharing of copyrighted files. Al­ though Grokster appears to have sent e-mails warning users about infringing content when it received threatening notice from the copyright holders, it never blocked anyone from continuing to use its software to share copyrighted files.

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Id., at 75–76. StreamCast not only rejected another com­ pany’s offer of help to monitor infringement, id., at 928–929, but blocked the Internet Protocol addresses of entities it be­ lieved were trying to engage in such monitoring on its net­ works, id., at 917–922.

After discovery, the parties on each side of the case cross­ moved for summary judgment. The District Court limited its consideration to the asserted liability of Grokster and StreamCast for distributing the current versions of their software, leaving aside whether either was liable “for dam­ ages arising from past versions of their software, or from 259 F. Supp. 2d 1029, 1033 (CD Cal. other past activities.” 2003). The District Court held that those who used the Grokster and Morpheus software to download copyrighted media files directly infringed MGM’s copyrights, a conclusion not contested on appeal, but the court nonetheless granted summary judgment in favor of Grokster and StreamCast as to any liability arising from distribution of the then-current versions of their software. Distributing that software gave rise to no liability in the court’s view, because its use did not provide the distributors with actual knowledge of specific acts of infringement. Case No. CV 01 08541 SVW (PJWx) (CD Cal., June 18, 2003), App. 1213.

The Court of Appeals affirmed.

380 F. 3d 1154 (CA9 2004).

In the court’s analysis, a defendant was liable as a contributory infringer when it had knowledge of direct in­ fringement and materially contributed to the infringement.

But the court read Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417 (1984), as holding that distribu­ tion of a commercial product capable of substantial nonin­ fringing uses could not give rise to contributory liability for infringement unless the distributor had actual knowledge of specific instances of infringement and failed to act on that knowledge. The fact that the software was capable of sub­ stantial noninfringing uses in the Ninth Circuit’s view meant

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that Grokster and StreamCast were not liable, because they had no such actual knowledge, owing to the decentralized architecture of their software. The court also held that Grokster and StreamCast did not materially contribute to their users’ infringement because it was the users them­ selves who searched for, retrieved, and stored the infringing files, with no involvement by the defendants beyond provid­ ing the software in the first place.

The Ninth Circuit also considered whether Grokster and StreamCast could be liable under a theory of vicarious in­ fringement. The court held against liability because the de­ fendants did not monitor or control the use of the software, had no agreed-upon right or current ability to supervise its use, and had no independent duty to police infringement.

We granted certiorari.

MGM and many of the amici fault the Court of Appeals’s holding for upsetting a sound balance between the respective values of supporting creative pursuits through copyright protection and promoting innovation in new communication technologies by limiting the incidence of liability for copy­ right infringement. The more artistic protection is favored, the more technological innovation may be discouraged; the administration of copyright law is an exercise in managing the tradeoff. See Sony Corp. v. Universal City Studios, supra, at 442; see generally Ginsburg, Copyright and Control Over New Technologies of Dissemination, 101 Colum. L. Rev.

1613 (2001); Lichtman & Landes, Indirect Liability for Copy­ right Infringement: An Economic Perspective, 16 Harv. J.

L. & Tech. 395 (2003).

The tension between the two values is the subject of this case, with its claim that digital distribution of copyrighted material threatens copyright holders as never before, be­ cause every copy is identical to the original, copying is easy,

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and many people (especially the young) use file-sharing soft­ ware to download copyrighted works. This very breadth of the software’s use may well draw the public directly into the debate over copyright policy, Peters, Brace Memorial Lec­ ture: Copyright Enters the Public Domain, 51 J. Copyright Soc. 701, 705–717 (2004) (address by Register of Copyrights), and the indications are that the ease of copying songs or movies using software like Grokster’s and Napster’s is fos­ tering disdain for copyright protection, Wu, When Code Isn’t Law, 89 Va. L. Rev. 679, 724–726 (2003). As the case has been presented to us, these fears are said to be offset by the different concern that imposing liability, not only on in­ fringers but on distributors of software based on its potential for unlawful use, could limit further development of benefi­ cial technologies. See, e. g., Lemley & Reese, Reducing Dig­ ital Copyright Infringement Without Restricting Innovation, 56 Stan. L. Rev. 1345, 1386–1390 (2004); Brief for Innovation Scholars and Economists as Amici Curiae 15–20; Brief for Emerging Technology Companies as Amici Curiae 19–25; Brief for Intel Corporation as Amicus Curiae 20–22.8

The argument for imposing indirect liability in this case is, however, a powerful one, given the number of infringing downloads that occur every day using StreamCast’s and Grokster’s software. When a widely shared service or prod­ uct is used to commit infringement, it may be impossible to

8 The mutual exclusivity of these values should not be overstated, how­ ever. On the one hand technological innovators, including those writing file-sharing computer programs, may wish for effective copyright protec­ tions for their work. See, e. g., Wu, When Code Isn’t Law, 89 Va. L. Rev.

679, 750 (2003).

(StreamCast itself was urged by an associate to “get [its] technology written down and [its intellectual property] protected.” App.

866.) On the other hand the widespread distribution of creative works through improved technologies may enable the synthesis of new works or generate audiences for emerging artists. See Eldred v. Ashcroft, 537

U. S. 186, 223–226 (2003) (Stevens, J., dissenting); Van Houweling, Dis­

tributive Values in Copyright, 83 Texas L. Rev. 1535, 1539–1540, 1562–1564 (2005); Brief for Sovereign Artists et al. as Amici Curiae 11.

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enforce rights in the protected work effectively against all direct infringers, the only practical alternative being to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringe­ ment. See In re Aimster Copyright Litigation, 334 F. 3d

One infringes contributorily by intentionally inducing or encouraging direct infringement, see Gershwin Pub. Corp. v.

Columbia Artists Management, Inc., 443 F. 2d 1159, 1162 (CA2 1971), and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it, Shapiro, Bernstein & Co. v. H. L. Green Co., 316

F. 2d 304, 307 (CA2 1963).9 Although “[t]he Copyright Act

does not expressly render anyone liable for infringement committed by another,” Sony Corp. v. Universal City Stu­ dios, 464 U. S., at 434, these doctrines of secondary liability emerged from common law principles and are well estab­ lished in the law, id., at 486 (Blackmun, J., dissenting); Kalem Co. v. Harper Brothers, 222 U. S. 55, 62–63 (1911); Gershwin Pub. Corp. v. Columbia Artists Management,

.

. .

9 We stated in Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417 (1984), that “ ‘the lines between direct infringement, contrib­ utory infringement and vicarious liability are not clearly drawn’ . [R]easoned analysis of [the Sony plaintiffs’ contributory infringement claim] necessarily entails consideration of arguments and case law which may also be forwarded under the other labels, and indeed the parties . . . rely upon such arguments and authority in support of their respective positions on the issue of contributory infringement,” id., at 435, n. 17 (quot­ ing Universal City Studios, Inc. v. Sony Corp. of America, 480 F. Supp.

429, 457–458 (CD Cal. 1979)).

In the present case MGM has argued a vicarious liability theory, which allows imposition of liability when the de­ fendant profits directly from the infringement and has a right and ability to supervise the direct infringer, even if the defendant initially lacks knowledge of the infringement. See, e. g., Shapiro, Bernstein & Co. v.

H. L. Green Co., 316 F. 2d 304, 308 (CA2 1963); Dreamland Ball Room,

Inc. v. Shapiro, Bernstein & Co., 36 F. 2d 354, 355 (CA7 1929). Because we resolve the case based on an inducement theory, there is no need to analyze separately MGM’s vicarious liability theory.

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Opinion of the Court supra, at 1162; 3 M. Nimmer & D. Nimmer, Copyright

Despite the currency of these principles of secondary lia­ bility, this Court has dealt with secondary copyright in­ fringement in only one recent case, and because MGM has tailored its principal claim to our opinion there, a look at our In Sony Corp. v. Universal City earlier holding is in order.

Studios, supra, this Court addressed a claim that secondary liability for infringement can arise from the very distribution of a commercial product. There, the product, novel at the time, was what we know today as the videocassette recorder or VCR. Copyright holders sued Sony as the manufacturer, claiming it was contributorily liable for infringement that oc­ curred when VCR owners taped copyrighted programs be­ cause it supplied the means used to infringe, and it had con­ structive knowledge that infringement would occur. At the trial on the merits, the evidence showed that the principal use of the VCR was for “ ‘time-shifting,’ ” or taping a pro­ gram for later viewing at a more convenient time, which the Id., at 423– Court found to be a fair, not an infringing, use.

424. There was no evidence that Sony had expressed an

object of bringing about taping in violation of copyright or had taken active steps to increase its profits from unlawful Id., at 438. Although Sony’s advertisements urged taping. consumers to buy the VCR to “ ‘record favorite shows’ ” or “ ‘build a library’ ” of recorded programs, id., at 459 (Black­ mun, J., dissenting), neither of these uses was necessarily infringing, id., at 424, 454–455.

On those facts, with no evidence of stated or indicated in­ tent to promote infringing uses, the only conceivable basis for imposing liability was on a theory of contributory in­ fringement arising from its sale of VCRs to consumers with Id., at knowledge that some would use them to infringe.

439. But because the VCR was “capable of commercially

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Opinion of the Court could not be faulted solely on the basis of its distribution.

Id., at 442.

This analysis reflected patent law’s traditional staple arti­ cle of commerce doctrine, now codified, that distribution of a component of a patented device will not violate the patent if 35 U. S. C. § 271(c); Aro it is suitable for use in other ways.

Mfg. Co. v. Convertible Top Replacement Co., 377 U. S. 476, 485 (1964) (noting codification of cases); id., at 486, n. 6 (same). The doctrine was devised to identify instances in which it may be presumed from distribution of an article in commerce that the distributor intended the article to be used to infringe another’s patent, and so may justly be held liable “One who makes and sells articles for that infringement. which are only adapted to be used in a patented combination will be presumed to intend the natural consequences of his acts; he will be presumed to intend that they shall be used in the combination of the patent.” New York Scaffolding Co. v. Whitney, 224 F. 452, 459 (CA8 1915); see also James Heekin Co. v. Baker, 138 F. 63, 66 (CA8 1905); Canda v. Mich­ igan Malleable Iron Co., 124 F. 486, 489 (CA6 1903); Thomson-Houston Electric Co. v. Ohio Brass Co., 80 F. 712, 720–721 (CA6 1897); Red Jacket Mfg. Co. v. Davis, 82 F. 432, 439 (CA7 1897); Holly v. Vergennes Machine Co., 4 F. 74, 82 (CC Vt. 1880); Renwick v. Pond, 20 F. Cas. 536, 541 (No. 11,702) (CC SDNY 1872).

In sum, where an article is “good for nothing else” but infringement, Canda v. Michigan Malleable Iron Co., supra, at 489, there is no legitimate public interest in its unlicensed availability, and there is no injustice in presuming or imput­ ing an intent to infringe, see Henry v. A. B. Dick Co., 224

U. S. 1, 48 (1912), overruled on other grounds, Motion Pic­

ture Patents Co. v. Universal Film Mfg. Co., 243 U. S. 502 (1917). Conversely, the doctrine absolves the equivocal con­ duct of selling an item with substantial lawful as well as un­ lawful uses, and limits liability to instances of more acute

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fault than the mere understanding that some of one’s prod­ It leaves breathing room for innova­ ucts will be misused. tion and a vigorous commerce. See Sony Corp. v. Universal City Studios, 464 U. S., at 442; Dawson Chemical Co. v.

Rohm & Haas Co., 448 U. S. 176, 221 (1980); Henry v. A. B.

Dick Co., supra, at 48.

The parties and many of the amici in this case think the key to resolving it is the Sony rule and, in particular, what it means for a product to be “capable of commercially signifi­ cant noninfringing uses.” Sony Corp. v. Universal City Studios, supra, at 442. MGM advances the argument that granting summary judgment to Grokster and StreamCast as to their current activities gave too much weight to the value of innovative technology, and too little to the copyrights in­ fringed by users of their software, given that 90% of works available on one of the networks was shown to be copy­ righted. Assuming the remaining 10% to be its noninfring­ ing use, MGM says this should not qualify as “substantial,” and the Court should quantify Sony to the extent of holding that a product used “principally” for infringement does not qualify. See Brief for Motion Picture Studio and Recording Company Petitioners 31. As mentioned before, Grokster and StreamCast reply by citing evidence that their software can be used to reproduce public domain works, and they point to copyright holders who actually encourage copying.

Even if infringement is the principal practice with their soft­ ware today, they argue, the noninfringing uses are signifi­ cant and will grow.

We agree with MGM that the Court of Appeals misapplied Sony, which it read as limiting secondary liability quite be­ yond the circumstances to which the case applied. Sony barred secondary liability based on presuming or imputing intent to cause infringement solely from the design or distri­ bution of a product capable of substantial lawful use, which the distributor knows is in fact used for infringement. The

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Ninth Circuit has read Sony’s limitation to mean that when­ ever a product is capable of substantial lawful use, the pro­ ducer can never be held contributorily liable for third par­ ties’ infringing use of it; it read the rule as being this broad, even when an actual purpose to cause infringing use is shown by evidence independent of design and distribution of the product, unless the distributors had “specific knowledge of infringement at a time at which they contributed to the in­ fringement, and failed to act upon that information.” 380

F. 3d, at 1162 (internal quotation marks and brackets omit­

ted). Because the Circuit found the StreamCast and Grok­ ster software capable of substantial lawful use, it concluded on the basis of its reading of Sony that neither company could be held liable, since there was no showing that their software, being without any central server, afforded them knowledge of specific unlawful uses.

This view of Sony, however, was error, converting the case from one about liability resting on imputed intent to one about liability on any theory. Because Sony did not displace other theories of secondary liability, and because we find below that it was error to grant summary judgment to the companies on MGM’s inducement claim, we do not revisit Sony further, as MGM requests, to add a more quantified description of the point of balance between protection and commerce when liability rests solely on distribution with knowledge that unlawful use will occur.

It is enough to note that the Ninth Circuit’s judgment rested on an erroneous understanding of Sony and to leave further consideration of the Sony rule for a day when that may be required.

Sony’s rule limits imputing culpable intent as a matter of law from the characteristics or uses of a distributed product.

But nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from

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the common law.10 Sony Corp. v. Universal City Studios, supra, at 439 (“If vicarious liability is to be imposed on Sony in this case, it must rest on the fact that it has sold equip­ ment with constructive knowledge” of the potential for in­ fringement). Thus, where evidence goes beyond a product’s characteristics or the knowledge that it may be put to in­ fringing uses, and shows statements or actions directed to promoting infringement, Sony’s staple-article rule will not preclude liability.

The classic case of direct evidence of unlawful purpose occurs when one induces commission of infringement by another, or “entic[es] or persuad[es] another” to infringe, Black’s Law Dictionary 790 (8th ed. 2004), as by advertising.

Thus at common law a copyright or patent defendant who “not only expected but invoked [infringing use] by advertise­ ment” was liable for infringement “on principles recognized in every part of the law.” Kalem Co. v. Harper Broth­ ers, 222 U. S., at 62–63 (copyright infringement). See also Henry v. A. B. Dick Co., 224 U. S., at 48–49 (contributory liability for patent infringement may be found where a good’s “most conspicuous use is one which will coo¨ perate in an in­ fringement when sale to such user is invoked by advertise­ ment” of the infringing use); Thomson-Houston Electric Co.

v. Kelsey Electric R. Specialty Co., 75 F. 1005, 1007–1008

(CA2 1896) (relying on advertisements and displays to find defendant’s “willingness . . . to aid other persons in any at­ tempts which they may be disposed to make towards [patent] infringement”); Rumford Chemical Works v. Hecker, 20 F. Cas. 1342, 1346 (No. 12,133) (CC NJ 1876) (demonstrations of infringing activity along with “avowals of the [infringing] purpose and use for which it was made” supported liability for patent infringement).

10 Nor does the Patent Act’s exemption from liability for those who dis­ tribute a staple article of commerce, 35 U. S. C. § 271(c), extend to those who induce patent infringement, § 271(b).

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The rule on inducement of infringement as developed in the early cases is no different today.11 Evidence of “active steps . . . taken to encourage direct infringement,” Oak In­ dustries, Inc. v. Zenith Electronics Corp., 697 F. Supp. 988, 992 (ND Ill. 1988), such as advertising an infringing use or instructing how to engage in an infringing use, show an af­ firmative intent that the product be used to infringe, and a showing that infringement was encouraged overcomes the law’s reluctance to find liability when a defendant merely sells a commercial product suitable for some lawful use, see,

e. g., Water Technologies Corp. v. Calco, Ltd., 850 F. 2d 660,

668 (CA Fed. 1988) (liability for inducement where one “ac­ tively and knowingly aid[s] and abet[s] another’s direct in­ fringement” (emphasis deleted)); Fromberg, Inc. v. Thorn­ hill, 315 F. 2d 407, 412–413 (CA5 1963) (demonstrations by sales staff of infringing uses supported liability for induce­ ment); Haworth Inc. v. Herman Miller Inc., 37 USPQ 2d 1080, 1090 (WD Mich. 1994) (evidence that defendant “dem­ onstrate[d] and recommend[ed] infringing configurations” of its product could support inducement liability); Sims v. Mack Trucks, Inc., 459 F. Supp. 1198, 1215 (ED Pa. 1978) (finding inducement where the use “depicted by the defendant in its promotional film and brochures infringes the . . . patent”), overruled on other grounds, 608 F. 2d 87 (CA3 1979). Cf. W.

Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Kee­ ton on Law of Torts 37 (5th ed. 1984) (“There is a definite tendency to impose greater responsibility upon a defendant whose conduct was intended to do harm, or was morally wrong”).

For the same reasons that Sony took the staple-article doc­ trine of patent law as a model for its copyright safe-harbor rule, the inducement rule, too, is a sensible one for copyright.

We adopt it here, holding that one who distributes a device with the object of promoting its use to infringe copyright, as

11 Inducement has been codified in patent law.

Ibid.

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shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of in­ fringement by third parties. We are, of course, mindful of the need to keep from trenching on regular commerce or discouraging the development of technologies with lawful and unlawful potential. Accordingly, just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe, 464 U. S., at 439, n. 19, mere knowledge of infringing poten­ tial or of actual infringing uses would not be enough here to subject a distributor to liability. Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves. The inducement rule, instead, premises liabil­ ity on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discour­ age innovation having a lawful promise.

The only apparent question about treating MGM’s evi­ dence as sufficient to withstand summary judgment under the theory of inducement goes to the need on MGM’s part to adduce evidence that StreamCast and Grokster communi­ cated an inducing message to their software users. The classic instance of inducement is by advertisement or solici­ tation that broadcasts a message designed to stimulate oth­ ers to commit violations. MGM claims that such a message is shown here.

It is undisputed that StreamCast beamed onto the computer screens of users of Napster-compatible programs ads urging the adoption of its OpenNap program, which was designed, as its name implied, to invite the cus­ tom of patrons of Napster, then under attack in the courts for facilitating massive infringement. Those who accepted StreamCast’s OpenNap program were offered software to perform the same services, which a factfinder could conclude

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would readily have been understood in the Napster market as the ability to download copyrighted music files. Grokster distributed an electronic newsletter containing links to arti­ cles promoting its software’s ability to access popular copy­ righted music. And anyone whose Napster or free file­ sharing searches turned up a link to Grokster would have understood Grokster to be offering the same file-sharing ability as Napster, and to the same people who probably used Napster for infringing downloads; that would also have been the understanding of anyone offered Grokster’s suggestively named Swaptor software, its version of OpenNap. And both companies communicated a clear message by responding af­ firmatively to requests for help in locating and playing copy­ righted materials.

In StreamCast’s case, of course, the evidence just de­ scribed was supplemented by other unequivocal indications of unlawful purpose in the internal communications and ad­ vertising designs aimed at Napster users (“When the lights went off at Napster . . . where did the users go?” App. 836 (ellipsis in original)). Whether the messages were commu­ nicated is not to the point on this record. The function of the message in the theory of inducement is to prove by a defendant’s own statements that his unlawful purpose dis­ qualifies him from claiming protection (and incidentally to point to actual violators likely to be found among those who hear or read the message). See supra, at 935–937. Prov­ ing that a message was sent out, then, is the preeminent but not exclusive way of showing that active steps were taken with the purpose of bringing about infringing acts, and of showing that infringing acts took place by using the device distributed. Here, the summary judgment record is replete with other evidence that Grokster and StreamCast, unlike the manufacturer and distributor in Sony, acted with a pur­ pose to cause copyright violations by use of software suitable for illegal use. See supra, at 924–927.

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Three features of this evidence of intent are particularly notable. First, each company showed itself to be aiming to satisfy a known source of demand for copyright infringe­ ment, the market comprising former Napster users.

StreamCast’s internal documents made constant reference to Napster, it initially distributed its Morpheus software through an OpenNap program compatible with Napster, it advertised its OpenNap program to Napster users, and its Morpheus software functions as Napster did except that it could be used to distribute more kinds of files, including copyrighted movies and software programs. Grokster’s name is apparently derived from Napster, it too initially of­ fered an OpenNap program, its software’s function is like­ wise comparable to Napster’s, and it attempted to divert queries for Napster onto its own Web site. Grokster and StreamCast’s efforts to supply services to former Napster users, deprived of a mechanism to copy and distribute what were overwhelmingly infringing files, indicate a principal, if not exclusive, intent on the part of each to bring about infringement.

Second, this evidence of unlawful objective is given added significance by MGM’s showing that neither company at­ tempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software. While the Ninth Circuit treated the defendants’ failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users’ activity, we think this evidence underscores Grokster’s and StreamCast’s intentional facilita­ tion of their users’ infringement.12

Third, there is a further complement to the direct evidence It is useful to recall that StreamCast

of unlawful objective.

12 Of course, in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the Sony safe harbor.

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and Grokster make money by selling advertising space, by directing ads to the screens of computers employing their software. As the record shows, the more the software is used, the more ads are sent out and the greater the advertis­ ing revenue becomes. Since the extent of the software’s use determines the gain to the distributors, the commercial sense of their enterprise turns on high-volume use, which the record shows is infringing.13 This evidence alone would not justify an inference of unlawful intent, but viewed in the context of the entire record its import is clear.

The unlawful objective is unmistakable.

In addition to intent to bring about infringement and dis­ tribution of a device suitable for infringing use, the induce­ ment theory of course requires evidence of actual infringe­ ment by recipients of the device, the software in this case.

As the account of the facts indicates, there is evidence of infringement on a gigantic scale, and there is no serious issue of the adequacy of MGM’s showing on this point in order to survive the companies’ summary judgment requests. Al­

13 Grokster and StreamCast contend that any theory of liability based on their conduct is not properly before this Court because the rulings in the trial and appellate courts dealt only with the present versions of their software, not “past acts . . . that allegedly encouraged infringement or assisted . . . known acts of infringement.” Brief for Respondents 14; see also id., at 34. This contention misapprehends the basis for their potential liability.

It is not only that encouraging a particular consumer to infringe a copyright can give rise to secondary liability for the infringement that results.

Inducement liability goes beyond that, and the distribution of a product can itself give rise to liability where evidence shows that the dis­ tributor intended and encouraged the product to be used to infringe.

In such a case, the culpable act is not merely the encouragement of infringe­ ment but also the distribution of the tool intended for infringing use. See Kalem Co. v. Harper Brothers, 222 U. S. 55, 62–63 (1911); Cable/Home Communication Corp. v. Network Productions, Inc., 902 F. 2d 829, 846 (CA11 1990); A&M Records, Inc. v. Abdallah, 948 F. Supp. 1449, 1456 (CD Cal. 1996).

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though an exact calculation of infringing use, as a basis for a claim of damages, is subject to dispute, there is no question that the summary judgment evidence is at least adequate to entitle MGM to go forward with claims for damages and equitable relief.

* * *

In sum, this case is significantly different from Sony and reliance on that case to rule in favor of StreamCast and Grokster was error. Sony dealt with a claim of liability based solely on distributing a product with alternative lawful and unlawful uses, with knowledge that some users would follow the unlawful course. The case struck a balance be­ tween the interests of protection and innovation by holding that the product’s capability of substantial lawful employ­ ment should bar the imputation of fault and consequent sec­ ondary liability for the unlawful acts of others.

MGM’s evidence in this case most obviously addresses a different basis of liability for distributing a product open to alternative uses. Here, evidence of the distributors’ words and deeds going beyond distribution as such shows a purpose to cause and profit from third-party acts of copyright in­ fringement.

If liability for inducing infringement is ulti­ mately found, it will not be on the basis of presuming or imputing fault, but from inferring a patently illegal objective from statements and actions showing what that objective was.

There is substantial evidence in MGM’s favor on all ele­ ments of inducement, and summary judgment in favor of Grokster and StreamCast was error. On remand, reconsid­ eration of MGM’s motion for summary judgment will be in order.

The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

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Ginsburg, J., concurring Justice Ginsburg, with whom The Chief Justice and

Justice Kennedy join, concurring.

I concur in the Court’s decision, which vacates in full the judgment of the Court of Appeals for the Ninth Circuit, ante, at 941, and write separately to clarify why I conclude that the Court of Appeals misperceived, and hence misapplied, our holding in Sony Corp. of America v. Universal City Stu­ dios, Inc., 464 U. S. 417 (1984). There is here at least a “gen­ uine issue as to [a] material fact,” Fed. Rule Civ. Proc. 56(c), on the liability of Grokster or StreamCast, not only for ac­ tively inducing copyright infringement, but also, or alterna­ tively, based on the distribution of their software products, for contributory copyright infringement. On neither score was summary judg ment for Grokster and StreamCast warranted.

At bottom, however labeled, the question in this case is whether Grokster and StreamCast are liable for the direct infringing acts of others. Liability under our jurisprudence may be predicated on actively encouraging (or inducing) in­ fringement through specific acts (as the Court’s opinion develops) or on distributing a product distributees use to infringe copyrights, if the product is not capable of “sub­ stantial” or “commercially significant” noninfringing uses.

Sony, 464 U. S., at 442; see also 3 M. Nimmer & D. Nimmer, Nimmer on Copyright § 12.04[A][2] (2005). While the two categories overlap, they capture different culpable behavior.

Long coexisting, both are now codified in patent law. Com­ pare 35 U. S. C. § 271(b) (active inducement liability) with § 271(c) (contributory liability for distribution of a product not “suitable for substantial noninfringing use”).

In Sony, 464 U. S. 417, the Court considered Sony’s liabil­ ity for selling the Betamax videocassette recorder.

It did so enlightened by a full trial record. Drawing an analogy to the staple article of commerce doctrine from patent law,

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the Sony Court observed that the “sale of an article . . . adapted to [a patent] infringing use” does not suffice “to make the seller a contributory infringer” if the article “is Id., at 441 (quoting also adapted to other and lawful uses.” Henry v. A. B. Dick Co., 224 U. S. 1, 48 (1912), overruled on other grounds, Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U. S. 502, 517 (1917)).

“The staple article of commerce doctrine” applied to copy­ right, the Court stated, “must strike a balance between a copyright holder’s legitimate demand for effective—not merely symbolic—protection of the statutory monopoly, and the rights of others freely to engage in substantially unre­ lated areas of commerce.” Sony, 464 U. S., at 442.

“Ac­ cordingly,” the Court held, “the sale of copying equipment, like the sale of other articles of commerce, does not consti­ tute contributory infringement if the product is widely used Indeed, it need for legitimate, unobjectionable purposes.

Ibid. merely be capable of substantial noninfringing uses.” Thus, to resolve the Sony case, the Court explained, it had to determine “whether the Betamax is capable of commercially significant noninfringing uses.”

Ibid.

To answer that question, the Court considered whether “a significant number of [potential uses of the Betamax were] Ibid. The Court homed in on one potential noninfringing.” use—private, noncommercial time-shifting of television pro­ grams in the home (i. e., recording a broadcast TV program for later personal viewing). Time-shifting was noninfring­ ing, the Court concluded, because in some cases trial testi­ mony showed it was authorized by the copyright holder, id., at 443–447, and in others it qualified as legitimate fair use, id., at 447–455. Most purchasers used the Betamax princi­ pally to engage in time-shifting, id., at 421, 423, a use that “plainly satisfie[d]” the Court’s standard, id., at 442. Thus, there was no need in Sony to “give precise content to the question of how much [actual or potential] use is commer­

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Ginsburg, J., concurring cially significant.” for later days and cases.

Ibid.1 Further development was left

The Ninth Circuit went astray, I will endeavor to explain, when that court granted summary judgment to Grokster and StreamCast on the charge of contributory liability based on distribution of their software products. Relying on its ear­ lier opinion in A&M Records, Inc. v. Napster, Inc., 239 F. 3d 1004 (CA9 2001), the Court of Appeals held that “if substan­ tial noninfringing use was shown, the copyright owner would be required to show that the defendant had reasonable knowledge of specific infringing files.” 380 F. 3d 1154, 1161 “A careful examination of the record,” the

1 Justice Breyer finds in Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417 (1984), a “clear” rule permitting contributory liability for copyright infringement based on distribution of a product only when the product “will be used almost exclusively to infringe copyrights.” Post, at 957. But cf. Sony, 464 U. S., at 442 (recognizing “copyright hold­ er’s legitimate demand for effective—not merely symbolic—protection”).

Sony, as I read it, contains no clear, near-exclusivity test. Nor have Courts of Appeals unanimously recognized Justice Breyer’s clear rule.

Compare A&M Records, Inc. v. Napster, Inc., 239 F. 3d 1004, 1021 (CA9 2001) (“[E]vidence of actual knowledge of specific acts of infringement is required to hold a computer system operator liable for contributory copy­ right infringement.”), with In re Aimster Copyright Litigation, 334 F. 3d 643, 649–650 (CA7 2003) (“[W]hen a supplier is offering a product or serv­ ice that has noninfringing as well as infringing uses, some estimate of the respective magnitudes of these uses is necessary for a finding of contribu­ tory infringement. . . . But the balancing of costs and benefits is necessary only in a case in which substantial noninfringing uses, present or prospec­ tive, are demonstrated.”). See also Matthew Bender & Co. v. West Pub.

Co., 158 F. 3d 693, 707 (CA2 1998) (“The Supreme Court applied [the Sony] test to prevent copyright holders from leveraging the copyrights in their original work to control distribution of . . . products that might be used incidentally for infringement, but that had substantial noninfringing uses. . . . The same rationale applies here [to products] that have substan­ tial, predominant and noninfringing uses as tools for research and cita­ tion.”). All Members of the Court agree, moreover, that “the Court of Appeals misapplied Sony,” at least to the extent it read that decision to limit “secondary liability” to a hardly ever category, “quite beyond the circumstances to which the case applied.” Ante, at 933.

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court concluded, “indicates that there is no genuine issue of Ibid. The appeals material fact as to noninfringing use.” court pointed to the band Wilco, which made one of its al­ bums available for free downloading, to other recording art­ ists who may have authorized free distribution of their music through the Internet, and to public domain literary works and films available through Grokster’s and StreamCast’s Ibid. Although it acknowledged petitioners’ software. (hereinafter MGM) assertion that “the vast majority of the software use is for copyright infringement,” the court con­ cluded that Grokster’s and StreamCast’s proffered evidence met Sony’s requirement that “a product need only be capable of substantial noninfringing uses.”

380 F. 3d, at 1162.2

This case differs markedly from Sony. Cf. Peters, Brace Memorial Lecture: Copyright Enters the Public Domain, 51

J. Copyright Soc. 701, 724 (2004) (“The Grokster panel’s read­

ing of Sony is the broadest that any court has given it . . . .”).

Here, there has been no finding of any fair use and little beyond anecdotal evidence of noninfringing uses.

In finding the Grokster and StreamCast software products capable of substantial noninfringing uses, the District Court and the Court of Appeals appear to have relied largely on declara­ tions submitted by the defendants. These declarations in­ clude assertions (some of them hearsay) that a number of copyright owners authorize distribution of their works on the Internet and that some public domain material is avail­ able through peer-to-peer networks including those accessed 380 F. 3d, through Grokster’s and StreamCast’s software. at 1161; 259 F. Supp. 2d 1029, 1035–1036 (CD Cal. 2003); App. 125–171.

2 Grokster and StreamCast, in the Court of Appeals’ view, would be entitled to summary judgment unless MGM could show that the software companies had knowledge of specific acts of infringement and failed to act on that knowledge—a standard the court held MGM could not meet. 380

F. 3d, at 1162–1163.

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The District Court declared it “undisputed that there are substantial noninfringing uses for Defendants’ software,” thus obviating the need for further proceedings.

259

F. Supp. 2d, at 1035. This conclusion appears to rest almost

entirely on the collection of declarations submitted by Grok­ Ibid. Review of these declarations ster and StreamCast. reveals mostly anecdotal evidence, sometimes obtained secondhand, of authorized copyrighted works or public do­ main works available online and shared through peer-to-peer networks, and general statements about the benefits of peer-to-peer technology. See, e. g., Decl. of Janis Ian ¶ 13, App. 128 (“P2P technologies offer musicians an alternative channel for promotion and distribution.”); Decl. of Gregory Newby ¶ 12, id., at 136 (“Numerous authorized and public domain Project Gutenberg eBooks are made available on Morpheus, Kazaa, Gnutella, Grokster, and similar software products.”); Decl. of Aram Sinnreich ¶ 6, id., at 151 (“file sharing seems to have a net positive impact on music sales”); Decl. of John Busher ¶ 8, id., at 166 (“I estimate that Acous­ tica generates sales of between $1,000 and $10,000 per month as a result of the distribution of its trialware software through the Gnutella and FastTrack Networks.”); Decl. of Patricia D. Hoekman ¶¶ 3–4, id., at 169–170 (search on Mor­ pheus for “President Bush speeches” found several video re­ cordings, searches for “Declaration of Independence” and “Bible” found various documents and declarant was able to download a copy of the Declaration); Decl. of Sean L. Mayers ¶ 11, id., at 67 (“Existing open, decentralized peer-to-peer file-sharing networks . . . offer content owners distinct busi­ ness advantages over alternate online distribution technolo­ gies.”). Compare Decl. of Brewster Kahle ¶ 20, id., at 142 (“Those who download the Prelinger films . . . are entitled to redistribute those files, and the Archive welcomes their redistribution by the Morpheus-Grokster-KaZaa community of users.”), with Deposition of Brewster Kahle (Sept. 18,

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2002), id., at 396–403 (testifying that he has no knowledge of any person downloading a Prelinger film using Morpheus, Grokster, or KaZaA). Compare also Decl. of Richard Prelin­ ger ¶ 17, id., at 147 (“[W]e welcome further redistribution of the Prelinger films . . . by individuals using peer-to-peer software products like Morpheus, KaZaA and Grokster.”), with Deposition of Richard Prelinger (Oct. 1, 2002), id., at 410–411 (“Q. What is your understanding of Grokster? A. I . Q. Do you know have no understanding of Grokster. . whether any user of the Grokster software has made avail­ able to share any Prelinger film? A. No.”). See also Deposition of Aram Sinnreich (Sept. 25, 2002), id., at 390 (tes­ timony about the band Wilco based on “[t]he press and indus­ try news groups and scuttlebutt.”). These declarations do not support summary judgment in the face of evidence, prof­ fered by MGM, of overwhelming use of Grokster’s and StreamCast’s software for infringement.3

.

3 Justice Breyer finds support for summary judgment in this motley collection of declarations and in a survey conducted by an expert retained by MGM. Post, at 952–955. That survey identified 75% of the files avail­ able through Grokster as copyrighted works owned or controlled by the plaintiffs, and 15% of the files as works likely copyrighted. App. 439. As to the remaining 10% of the files, “there was not enough information to form reasonable conclusions either as to what those files even consisted of, Id., at 479. and/or whether they were infringing or non-infringing.” Even assuming, as Justice Breyer does, that the Sony Court would have absolved Sony of contributory liability solely on the basis of the use of the Betamax for authorized time-shifting, post, at 950–951, summary judg­ ment is not inevitably appropriate here. Sony stressed that the plaintiffs there owned “well below 10%” of copyrighted television programming, 464

U. S., at 443, and found, based on trial testimony from representatives of

the four major sports leagues and other individuals authorized to consent to home recording of their copyrighted broadcasts, that a similar percent­ age of program copying was authorized, id., at 424. Here, the plaintiffs allegedly control copyrights for 70% or 75% of the material exchanged through the Grokster and StreamCast software, 380 F. 3d 1154, 1158 (CA9 2004); App. 439, and the District Court does not appear to have relied on comparable testimony about authorized copying from copyright holders.

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Even if the absolute number of noninfringing files copied using the Grokster and StreamCast software is large, it does not follow that the products are therefore put to substantial noninfringing uses and are thus immune from liability. The number of noninfringing copies may be reflective of, and dwarfed by, the huge total volume of files shared. Further, the District Court and the Court of Appeals did not sharply distinguish between uses of Grokster’s and StreamCast’s software products (which this case is about) and uses of peer-to-peer technology generally (which this case is not about).

In sum, when the record in this case was developed, there was evidence that Grokster’s and StreamCast’s products were, and had been for some time, overwhelmingly used to infringe, ante, at 922–924; App. 434–439, 476–481, and that this infringement was the overwhelming source of revenue from the products, ante, at 925–926; 259 F. Supp. 2d, at 1043–

demonstrate, beyond genuine debate, a reasonable prospect that substantial or commercially significant noninfringing uses were likely to develop over time. On this record, the District Court should not have ruled dispositively on the contributory infringement charge by granting summary judgment to Grokster and StreamCast.4

If, on remand, the case is not resolved on summary judg­ ment in favor of MGM based on Grokster and StreamCast actively inducing infringement, the Court of Appeals, I

4 The District Court’s conclusion that “[p]laintiffs do not dispute that [d]efendants’ software is being used, and could be used, for substantial noninfringing purposes,” 259 F. Supp. 2d 1029, 1036 (CD Cal. 2003); accord 380 F. 3d, at 1161, is, to say the least, dubious.

In the courts below and in this Court, MGM has continuously disputed any such conclusion. Brief for Motion Picture Studio and Recording Company Petitioners 30–38; Brief for MGM Plaintiffs-Appellants in No. 03–55894 etc. (CA9), p. 41; App.

356–357, 361–365.

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would emphasize, should reconsider, on a fuller record, its interpretation of Sony’s product distribution holding.

Justice Breyer, with whom Justice Stevens and Jus­ tice O’Connor join, concurring.

I agree with the Court that the distributor of a dual-use technology may be liable for the infringing activities of third parties where he or she actively seeks to advance the in­ fringement. Ante, at 919. I further agree that, in light of our holding today, we need not now “revisit” Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417 (1984).

Ante, at 934. Other Members of the Court, however, take up the Sony question: whether Grokster’s product is “capa­ ble of ‘substantial’ or ‘commercially significant’ noninfringing uses.” Ante, at 942 (Ginsburg, J., concurring) (quoting Sony, supra, at 442). And they answer that question by stating that the Court of Appeals was wrong when it granted summary judgment on the issue in Grokster’s favor. Ante, at 944. I write to explain why I disagree with them on this matter.

The Court’s opinion in Sony and the record evidence (as described and analyzed in the many briefs before us) to­ gether convince me that the Court of Appeals’ conclusion has adequate legal support.

I begin with Sony’s standard.

In Sony, the Court consid­ ered the potential copyright liability of a company that did not itself illegally copy protected material, but rather sold a machine—a videocassette recorder (VCR)—that could be used to do so. A buyer could use that machine for non­ infringing purposes, such as recording for later viewing (sometimes called “ ‘time-shifting,’ ” Sony, 464 U. S., at 421) uncopyrighted television programs or copyrighted programs with a copyright holder’s permission. The buyer could use

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the machine for infringing purposes as well, such as building libraries of taped copyrighted programs. Or, the buyer might use the machine to record copyrighted programs under circumstances in which the legal status of the act of recording was uncertain (i. e., where the copying may, or may not, have constituted a “fair use,” id., at 425–426).

Sony knew many customers would use its VCRs to engage Id., at in unauthorized copying and “ ‘library-building.’ ” 458–459 (Blackmun, J., dissenting). But that fact, said the Court, was insufficient to make Sony itself an infringer.

And the Court ultimately held that Sony was not liable for its customers’ acts of infringement.

Id., at 442.

In reaching this conclusion, the Court recognized the need for the law, in fixing secondary copyright liability, to “strike a balance between a copyright holder’s legitimate demand for effective—not merely symbolic—protection of the statu­ tory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce.” It pointed to patent law’s “staple article of commerce” doctrine, ibid., under which a distributor of a product is not liable for patent infringement by its customers unless that product is “unsuited for any commercial noninfringing use.” Dawson Chemical Co. v. Rohm & Haas Co., 448 U. S. 176, 198 (1980).

The Court wrote that the sale of copying equipment, “like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used Indeed, it need for legitimate, unobjectionable purposes. merely be capable of substantial noninfringing uses.” Sony, 464 U. S., at 442 (emphasis added). The Court ulti­ mately characterized the legal “question” in the particular case as “whether [Sony’s VCR] is capable of commercially significant noninfringing uses” (while declining to give Ibid. (emphasis added). “precise content” to these terms).

It then applied this standard. The Court had before it a survey (commissioned by the District Court and then pre­ pared by the respondents) showing that roughly 9% of all

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VCR recordings were of the type—namely, religious, educa­ tional, and sports programming—owned by producers and distributors testifying on Sony’s behalf who did not object to time-shifting. See Brief for Respondents, O. T. 1983, No. 81–1687, pp. 52–53; see also Sony, supra, at 424 (7.3% of all Sony VCR use is to record sports programs; representa­ tives of the sports leagues do not object). A much higher percentage of VCR users had at one point taped an author­ ized program, in addition to taping unauthorized programs.

And the plaintiffs—not a large class of content providers as in this case—owned only a small percentage of the total available unauthorized programming. See ante, at 947, n. 3 (Ginsburg, J., concurring). But of all the taping actually done by Sony’s customers, only around 9% was of the sort the Court referred to as authorized.

The Court found that the magnitude of authorized pro­ gramming was “significant,” and it also noted the “significant potential for future authorized copying.” 464 U. S., at 444.

The Court supported this conclusion by referencing the trial testimony of professional sports league officials and a reli­ Id., at 444, and n. 24. gious broadcasting representative.

It also discussed (1) a Los Angeles educational station affili­ ated with the Public Broadcasting Service that made many of its programs available for home taping, and (2) Mr. Rogers’ Id., at Neighborhood, a widely watched children’s program.

445. On the basis of this testimony and other similar evi­

dence, the Court determined that producers of this kind had authorized duplication of their copyrighted programs “in sig­ nificant enough numbers to create a substantial market for Id., at 447, n. 28 (empha­ a noninfringing use of the” VCR. sis added).

The Court, in using the key word “substantial,” indicated that these circumstances alone constituted a sufficient basis for rejecting the imposition of secondary liability. See id., at 456 (“Sony demonstrated a significant likelihood that sub­ stantial numbers of copyright holders” would not object

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to time-shifting (emphasis added)). Nonetheless, the Court buttressed its conclusion by finding separately that, in any event, un-authorized time-shifting often constituted not in­ fringement, but “fair use.”

Id., at 447–456.

When measured against Sony’s underlying evidence and analysis, the evidence now before us shows that Grokster passes Sony’s test—that is, whether the company’s product is capable of substantial or commercially significant non­ Id., at 442. For one thing, petitioners’ infringing uses. (hereinafter MGM) own expert declared that 75% of current files available on Grokster are infringing and 15% are “likely infringing.” See App. 436–439, ¶¶ 6–17 (Decl. of Dr. Ingram Olkin); cf. ante, at 922 (opinion of the Court). That leaves some number of files near 10% that apparently are nonin­ fringing, a figure very similar to the 9% or so of authorized time-shifting uses of the VCR that the Court faced in Sony.

As in Sony, witnesses here explained the nature of the noninfringing files on Grokster’s network without detailed

—Authorized copies of music by artists such as Wilco, Janis Ian, Pearl Jam, Dave Matthews, John Mayer, and others.

See App. 152–153, ¶¶ 9–13 (Decl. of Aram Sinnreich) (Wilco’s “lesson has already been adopted by artists still signed to their major labels”); id., at 170, ¶¶ 5–7 (Decl. of Patricia D.

Hoekman) (locating “numerous audio recordings” that were authorized for swapping); id., at 74, ¶ 10 (Decl. of Daniel B.

Rung) (describing Grokster’s partnership with a company that hosts music from thousands of independent artists) —Free electronic books and other works from various online publishers, including Project Gutenberg. See id., at 136, ¶ 12 (Decl. of Gregory Newby) (“Numerous authorized and public domain Project Gutenberg eBooks are made available” on Grokster. Project Gutenberg “welcomes this widespread

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sharing . . . using these software products[,] since they assist us in meeting our objectives”); id., at 159–160, ¶ 32 (Decl. of Sinnreich) —Public domain and authorized software, such as WinZip Id., at 170, ¶ 8 (Decl. of Hoekman); id., at 165, ¶¶ 4–7 8.1.

(Decl. of John Busher) —Licensed music videos and television and movie segments distributed via digital video packaging with the permission Id., at 70, ¶ 24 (Decl. of Sean L. of the copyright holder.

Mayers).

The nature of these and other lawfully swapped files is such that it is reasonable to infer quantities of current lawful use roughly approximate to those at issue in Sony. At least, MGM has offered no evidence sufficient to survive summary judgment that could plausibly demonstrate a significant quantitative difference. See ante, at 922 (opinion of the Court); see also Brief for Motion Picture Studio and Record­ ing Company Petitioners i (referring to “at least 90% of the total use of the services”); but see ante, at 947, n. 3 (Gins­ burg, J., concurring). To be sure, in quantitative terms these uses account for only a small percentage of the total number of uses of Grokster’s product. But the same was true in Sony, which characterized the relatively limited au­ thorized copying market as “substantial.” (The Court made clear as well in Sony that the amount of material then pres­ ently available for lawful copying—if not actually copied— was significant, see 464 U. S., at 444, and the same is cer­ tainly true in this case.)

Importantly, Sony also used the word “capable,” asking whether the product is “capable of ” substantial noninfring­ ing uses.

Its language and analysis suggest that a figure like 10%, if fixed for all time, might well prove insufficient, but that such a figure serves as an adequate foundation where there is a reasonable prospect of expanded legitimate uses over time. See ibid. (noting a “significant potential for future authorized copying”). And its language also indi­

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cates the appropriateness of looking to potential future uses of the product to determine its “capability.”

Here the record reveals a significant future market for noninfringing uses of Grokster-type peer-to-peer software.

Such software permits the exchange of any sort of digital file—whether that file does, or does not, contain copyrighted material. As more and more uncopyrighted information is stored in swappable form, it seems a likely inference that lawful peer-to-peer sharing will become increasingly preva­ lent. See, e. g., App. 142, ¶ 20 (Decl. of Brewster Kahle) (“[T]he [Internet Archive] welcomes [the] redistribution [of authorized films] by the Morpheus-Grokster-KaZaa commu­ nity of users”); id., at 166, ¶ 8 (Decl. of Busher) (sales figures of $1,000 to $10,000 per month through peer-to-peer net­ works “will increase in the future as Acoustica’s trialware is more widely distributed through these networks”); id., at 156–163, ¶¶ 21–40 (Decl. of Sinnreich).

And that is just what is happening. Such legitimate non­ infringing uses are coming to include the swapping of: re­ search information (the initial purpose of many peer-to-peer networks); public domain films (e. g., those owned by the Prelinger Archive); historical recordings and digital educa­ tional materials (e. g., those stored on the Internet Archive); digital photos (OurPictures, for example, is starting a P2P photo-swapping service); “shareware” and “freeware” (e. g., Linux and certain Windows software); secure licensed music and movie files (Intent MediaWorks, for example, protects licensed content sent across P2P networks); news broadcasts past and present (the BBC Creative Archive lets users “rip, mix and share the BBC”); user-created audio and video files (including “podcasts” that may be distributed through P2P software); and all manner of free “open content” works col­ lected by Creative Commons (one can search for Creative Commons material on StreamCast). See Brief for Distrib­ uted Computing Industry Association as Amicus Curiae 15–26; Merges, A New Dynamism in the Public Domain, 71

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U. Chi. L. Rev. 183 (2004).

I can find nothing in the record that suggests that this course of events will not continue to flow naturally as a consequence of the character of the soft­ ware taken together with the foreseeable development of the Internet and of information technology. Cf. ante, at 920 (opinion of the Court) (discussing the significant benefits of peer-to-peer technology).

There may be other now-unforeseen noninfringing uses that develop for peer-to-peer software, just as the home­ video rental industry (unmentioned in Sony) developed for the VCR. But the foreseeable development of such uses, when taken together with an estimated 10% noninfringing material, is sufficient to meet Sony’s standard. And while Sony considered the record following a trial, there are no facts asserted by MGM in its summary judgment filings that lead me to believe the outcome after a trial here could be any different. The lower courts reached the same conclusion.

Of course, Grokster itself may not want to develop these other noninfringing uses. But Sony’s standard seeks to pro­ tect not the Groksters of this world (which in any event may well be liable under today’s holding), but the development of technology more generally. And Grokster’s desires in this respect are beside the point.

The real question here, I believe, is not whether the record evidence satisfies Sony. As I have interpreted the standard set forth in that case, it does. And of the Courts of Appeals that have considered the matter, only one has proposed inter­ preting Sony more strictly than I would do—in a case where In re the product might have failed under any standard.

Aimster Copyright Litigation, 334 F. 3d 643, 653 (CA7 2003) (defendant “failed to show that its service is ever used for any purpose other than to infringe” copyrights (emphasis added)); see Matthew Bender & Co. v. West Pub. Co., 158

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F. 3d 693, 706–707 (CA2 1998) (court did not require that

noninfringing uses be “predominant,” it merely found that they were predominant, and therefore provided no analysis of Sony’s boundaries); but see ante, at 944, n. 1 (Ginsburg, J., concurring); see also A&M Records, Inc. v. Napster, Inc.,

239 F. 3d 1004, 1020 (CA9 2001) (discussing Sony); Cable/

Home Communication Corp. v. Network Productions, Inc., 902 F. 2d 829, 842–847 (CA11 1990) (same); Vault Corp. v.

Quaid Software, Ltd., 847 F. 2d 255, 262 (CA5 1988) (same); cf. Dynacore Holdings Corp. v. U. S. Philips Corp., 363 F. 3d 1263, 1275 (CA Fed. 2004) (same); see also Doe v. GTE Corp., 347 F. 3d 655, 661 (CA7 2003) (“A person may be liable as a contributory infringer if the product or service it sells has no (or only slight) legal use”).

Instead, the real question is whether we should modify the Sony standard, as MGM requests, or interpret Sony more strictly, as I believe Justice Ginsburg’s approach would do in practice. Compare ante, at 944–948 (concurring opinion) (insufficient evidence in this case of both present lawful uses and of a reasonable prospect that substantial noninfringing uses would develop over time), with Sony, 464 U. S., at 442– 447 (basing conclusion as to the likely existence of a substan­ tial market for authorized copying upon general declarations, some survey data, and common sense).

As I have said, Sony itself sought to “strike a balance be­ tween a copyright holder’s legitimate demand for effective— not merely symbolic—protection of the statutory monopoly, and the rights of others freely to engage in substantially un­ Id., at 442. Thus, to deter­ related areas of commerce.” mine whether modification, or a strict interpretation, of Sony is needed, I would ask whether MGM has shown that Sony incorrectly balanced copyright and new-technology interests.

In particular: (1) Has Sony (as I interpret it) worked to pro­

(2) If so, would modification or strict

tect new technology?

(3) If

interpretation significantly weaken that protection?

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so, would new or necessary copyright-related benefits out­ weigh any such weakening?

The first question is the easiest to answer. Sony’s rule, as I interpret it, has provided entrepreneurs with needed assurance that they will be shielded from copyright liability as they bring valuable new technologies to market.

Sony’s rule is clear. That clarity allows those who de­ velop new products that are capable of substantial nonin­ fringing uses to know, ex ante, that distribution of their product will not yield massive monetary liability. At the same time, it helps deter them from distributing products that have no other real function than—or that are specifically intended for—copyright infringement, deterrence that the Court’s holding today reinforces (by adding a weapon to the copyright holder’s legal arsenal).

Sony’s rule is strongly technology protecting. The rule deliberately makes it difficult for courts to find secondary liability where new technology is at issue.

It establishes that the law will not impose copyright liability upon the dis­ tributors of dual-use technologies (who do not themselves en­ gage in unauthorized copying) unless the product in question will be used almost exclusively to infringe copyrights (or unless they actively induce infringements as we today de­ scribe). Sony thereby recognizes that the copyright laws are not intended to discourage or to control the emergence of new technologies, including (perhaps especially) those that help disseminate information and ideas more broadly or more efficiently. Thus Sony’s rule shelters VCRs, typewriters, tape recorders, photocopiers, computers, cassette players, compact disc burners, digital video recorders, MP3 players, Internet search engines, and peer-to-peer software. But Sony’s rule does not shelter descramblers, even if one could theoretically use a descrambler in a noninfringing way.

464

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U. S., at 441–442. Compare Cable/Home Communication

Corp., supra, at 837–850 (developer liable for advertising television signal descrambler), with Vault Corp., supra, at 262 (primary use infringing but a substantial noninfringing use).

Sony’s rule is forward looking. It does not confine its scope to a static snapshot of a product’s current uses (thereby threatening technologies that have undeveloped fu­ ture markets). Rather, as the VCR example makes clear, a product’s market can evolve dramatically over time. And Sony—by referring to a capacity for substantial noninfring­ ing uses—recognizes that fact. Sony’s word “capable” re­ fers to a plausible, not simply a theoretical, likelihood that such uses will come to pass, and that fact anchors Sony in practical reality. Cf. Aimster, 334 F. 3d, at 651.

Sony’s rule is mindful of the limitations facing judges where matters of technology are concerned. Judges have no specialized technical ability to answer questions about present or future technological feasibilility or commercial vi­ ability where technology professionals, engineers, and ven­ ture capitalists themselves may radically disagree and where answers may differ depending upon whether one focuses upon the time of product development or the time of distri­ bution. Consider, for example, the question whether de­ vices can be added to Grokster’s software that will filter out infringing files. MGM tells us this is easy enough to do, as do several amici that produce and sell the filtering technol­ ogy. See, e. g., Brief for Motion Picture Studio and Record­ ing Company Petitioners 11; Brief for Audible Magic Corp. et al. as Amici Curiae 3–10. Grokster says it is not at all easy to do, and not an efficient solution in any event, and several apparently disinterested computer science professors agree. See Brief for Respondents 31; Brief for Computer Science Professor Harold Abelson et al. as Amici Curiae 6–10, 14–18. Which account should a judge credit? Sony says that the judge will not necessarily have to decide.

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Given the nature of the Sony rule, it is not surprising that in the last 20 years, there have been relatively few contribu­ tory infringement suits—based on a product distribution the­ ory—brought against technology providers (a small hand­ ful of federal appellate court cases and perhaps fewer than

two dozen District Court cases in the last 20 years). have found nothing in the briefs or the record that shows that Sony has failed to achieve its innovation-protecting objective.

The second, more difficult, question is whether a modified Sony rule (or a strict interpretation) would significantly weaken the law’s ability to protect new technology. Jus­ tice Ginsburg’s approach would require defendants to produce considerably more concrete evidence—more than was presented here—to earn Sony’s shelter. That heavier evidentiary demand, and especially the more dramatic (case­ by-case balancing) modifications that MGM and the Govern­ ment seek, would, I believe, undercut the protection that Sony now offers.

To require defendants to provide, for example, detailed evidence—say, business plans, profitability estimates, pro­ jected technological modifications, and so forth—would doubtless make life easier for copyright holder plaintiffs.

But it would simultaneously increase the legal uncertainty that surrounds the creation or development of a new technol­ ogy capable of being put to infringing uses.

Inventors and entrepreneurs (in the garage, the dorm room, the corporate lab, or the boardroom) would have to fear (and in many cases endure) costly and extensive trials when they create, pro­ duce, or distribute the sort of information technology that can be used for copyright infringement. They would often be left guessing as to how a court, upon later review of the product and its uses, would decide when necessarily rough estimates amounted to sufficient evidence. They would have no way to predict how courts would weigh the respec­

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tive values of infringing and noninfringing uses; determine the efficiency and advisability of technological changes; or assess a product’s potential future markets. The price of a wrong guess—even if it involves a good-faith effort to assess technical and commercial viability—could be large statutory damages (not less than $750 and up to $30,000 per infringed work).

17 U. S. C. § 504(c)(1). The additional risk and un­

certainty would mean a consequent additional chill of techno­ logical development.

The third question—whether a positive copyright impact would outweigh any technology-related loss—I find the most I do not doubt that a more intrusive difficult of the three.

Sony test would generally provide greater revenue security for copyright holders. But it is harder to conclude that the gains on the copyright swings would exceed the losses on the technology roundabouts.

For one thing, the law disfavors equating the two different kinds of gain and loss; rather, it leans in favor of protecting technology. As Sony itself makes clear, the producer of a technology which permits unlawful copying does not himself engage in unlawful copying—a fact that makes the attach­ ment of copyright liability to the creation, production, or dis­ tribution of the technology an exceptional thing. See 464

U. S., at 431 (courts “must be circumspect” in construing the

copyright laws to preclude distribution of new technologies).

Moreover, Sony has been the law for some time. And that fact imposes a serious burden upon copyright holders like MGM to show a need for change in the current rules of the game, including a more strict interpretation of the test.

See, e. g., Brief for Motion Picture Studio and Recording Company Petitioners 31 (Sony should not protect products when the “primary or principal” use is infringing).

In any event, the evidence now available does not, in my view, make out a sufficiently strong case for change. To say

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this is not to doubt the basic need to protect copyrighted material from infringement. The Constitution itself stresses the vital role that copyright plays in advancing the “useful Arts.” Art. I, § 8, cl. 8. No one disputes that “re­ ward to the author or artist serves to induce release to the public of the products of his creative genius.” United States

v. Paramount Pictures, Inc., 334 U. S. 131, 158 (1948). And

deliberate unlawful copying is no less an unlawful taking of property than garden-variety theft. See, e. g., 18 U. S. C. § 2319 (2000 ed. and Supp. II) (criminal copyright infringe­ ment); § 1961(1)(B) (2000 ed., Supp. II) (copyright infringe­ ment can be a predicate act under the Racketeer Influenced and Corrupt Organizations Act); § 1956(c)(7)(D) (2000 ed., Supp. II) (money laundering includes the receipt of proceeds from copyright infringement). But these highly general principles cannot by themselves tell us how to balance the interests at issue in Sony or whether Sony’s standard needs modification. And at certain key points, information is lacking.

Will an unmodified Sony lead to a significant diminution in the amount or quality of creative work produced? Since copyright’s basic objective is creation and its revenue objec­ tives but a means to that end, this is the underlying copy­ right question. See Twentieth Century Music Corp. v.

Aiken, 422 U. S. 151, 156 (1975) (“Creative work is to be en­ couraged and rewarded, but private motivation must ulti­ mately serve the cause of promoting broad public availability of literature, music, and the other arts”). And its answer is far from clear.

Unauthorized copying likely diminishes industry revenue, though it is not clear by how much. Compare S. Liebowitz, Will MP3 Downloads Annihilate the Record Industry? The Evidence So Far 2 (June 2003), http://www.utdallas.edu/ ~liebowit/intprop/records.pdf (all Internet materials as vis­ ited June 24, 2005, and available in Clerk of Court’s case file)

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(file sharing has caused a decline in music sales), and Press Release, Informa Telecoms & Media, Steady Download Growth Defies P2P (Dec. 6, 2004), http://www.informatm.com (citing Informa Media Group Report, Music on the Internet (5th ed. 2004)) (estimating total lost sales to the music indus­ try in the range of $2 billion annually), with F. Oberholzer

An Empirical Analysis 24 (Mar. 2004), www.unc.edu/~cigar/ papers/FileSharing_March2004.pdf (academic study con­ cluding that “file sharing has no statistically significant effect on purchases of the average album”), and D. McGuire, Study: File-Sharing No Threat to Music Sales (Mar. 29, 2004), http://www.washingtonpost.com/ac2/wp-dyn/A34300­ 2004Mar29?language=printer (discussing mixed evidence).

The extent to which related production has actually and resultingly declined remains uncertain, though there is good reason to believe that the decline, if any, is not sub­ stantial. See, e. g., M. Madden, Pew Internet & Amer­ ican Life Project, Artists, Musicians, and the Internet 21 (Dec. 5, 2004), http://www.pewinternet.org/pdfs/PIP_Artists.

Musicians_Report.pdf (nearly 70% of musicians believe that file sharing is a minor threat or no threat at all to creative industries); Benkler, Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production, 114 Yale L. J. 273, 351–352 (2004) (“Much of the actual flow of revenue to artists—from performances and other sources—is stable even assuming a complete displace­ ment of the CD market by peer-to-peer distribution . . . . [I]t would be silly to think that music, a cultural form with­ out which no human society has existed, will cease to be in our world [because of illegal file swapping]”).

More importantly, copyright holders at least potentially have other tools available to reduce piracy and to abate whatever threat it poses to creative production. As today’s opinion makes clear, a copyright holder may proceed against

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a technology provider where a provable specific intent to in­ fringe (of the kind the Court describes) is present. Ante, at 941. Services like Grokster may well be liable under an inducement theory.

In addition, a copyright holder has always had the legal authority to bring a traditional infringement suit against one who wrongfully copies.

Indeed, since September 2003, the Recording Industry Association of America (RIAA) has filed “thousands of suits against people for sharing copyrighted material.” Walker, New Movement Hits Universities: Get Legal Music, Washington Post, Mar. 17, 2005, p. E1. These suits have provided copyright holders with damages; have served as a teaching tool, making clear that much file shar­ ing, if done without permission, is unlawful; and apparently have had a real and significant deterrent effect. See, e. g.,

Project and comScore Media Metrix Data Memo: The state of music downloading and file-sharing online 2, 4, 6, 10 (Apr.

2004), http://www.pewinternet.org/pdfs/PIP_Filesharing_ April_04.pdf (number of people downloading files fell from a peak of roughly 35 million to roughly 23 million in the year following the first suits; 38% of current downloaders report downloading fewer files because of the suits); M. Madden &

downloading moves beyond P2P, p. 7 (Mar. 2005), http://www. pewinternet.org/pdfs/PIP_Filesharing_March05.pdf (number of downloaders has “inched up” but “continues to rest well below the peak level”); Note, Costs and Benefits of the Re­ cording Industry’s Litigation Against Individuals, 20 Berke­ ley Tech. L. J. 571 (2005); but see Evangelista, File Sharing; Downloading Music and Movie Files is as Popular as Ever, San Francisco Chronicle, Mar. 28, 2005, p. E1 (referring to the continuing “tide of rampant copyright infringement,” while noting that the RIAA says it believes the “campaign of lawsuits and public education has at least contained the problem”).

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Further, copyright holders may develop new technological devices that will help curb unlawful infringement. Some new technology, called “digital ‘watermarking’ ” and “digital fingerprint[ing],” can encode within the file information about the author and the copyright scope and date, which “fingerprints” can help to expose infringers. RIAA Reveals Method to Madness, Wired News (Aug. 28, 2003), http:// www.wired.com/news/digiwood/0,1412,60222,00.html; Besek, Anti-Circumvention Laws and Copyright: A Report from the Kernochan Center for Law, Media and the Arts, 27 Colum.

J. L. & Arts 385, 391, 451 (2004). Other technology can,

through encryption, potentially restrict users’ ability to make a digital copy. See J. Borland, Tripping the Rippers, C/net News.com (Sept. 28, 2001), http://news.com.com/ Tripping+the+rippers/2009-1023_3-273619.html; but see Brief for Bridgemar Services, Ltd. d/ b/a iMesh.com as Ami­ cus Curiae 5–8 (arguing that peer-to-peer service providers can more easily block unlawful swapping).

At the same time, advances in technology have discour­ aged unlawful copying by making lawful copying (e. g., downloading music with the copyright holder’s permission) cheaper and easier to achieve. Several services now sell music for less than $1 per song.

(Walmart.com, for example, charges $0.88 each.) Consequently, many consumers ini­ tially attracted to the convenience and flexibility of serv­ ices like Grokster are now migrating to lawful paid services (services with copying permission) where they can enjoy at little cost even greater convenience and flex­ ibility without engaging in unlawful swapping. See Wu, When Code Isn’t Law, 89 Va. L. Rev. 679, 731–735 (2003) (noting the prevalence of technological problems on unpaid swapping sites); K. Dean, P2P Tilts Toward Legitimacy, Wired News (Nov. 24, 2004), http://www.wired.com/news/ digiwood/0,1412,65836,00.html; Madden & Rainie, March 2005 Data Memo, supra, at 6–8 (percentage of current download­ ers who have used paid services rose from 24% to 43% in a year; number using free services fell from 58% to 41%).

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Thus, lawful music downloading services—those that charge the customer for downloading music and pay royalties to the copyright holder—have continued to grow and to produce substantial revenue. See Brief for Internet Law Faculty as Amicus Curiae 5–20; Bruno, Digital Entertain­ ment: Piracy Fight Shows Encouraging Signs (Mar. 5, 2005), available at LEXIS, News Library, Billboard File (in 2004, consumers worldwide purchased more than 10 times the number of digital tracks purchased in 2003; global digital music market of $330 million in 2004 expected to double in 2005); Press Release, Informa Telecoms & Media, Steady Download Growth Defies P2P (global digital revenues will likely exceed $3 billion in 2010); Ashton, [International Fed­ eration of the Phonographic Industry] Predicts Downloads Will Hit the Mainstream, Music Week, Jan. 29, 2005, p. 6 (legal music sites and portable MP3 players “are helping to transform the digital music market” into “an everyday con­ sumer experience”). And more advanced types of non­ music-oriented peer-to-peer networks have also started to develop, drawing in part on the lessons of Grokster.

Finally, as Sony recognized, the legislative option remains available. Courts are less well suited than Congress to the task of “accommodat[ing] fully the varied permutations of competing interests that are inevitably implicated by such new technology.” Sony, 464 U. S., at 431; see, e. g., Audio Home Recording Act of 1992, 106 Stat. 4237 (adding 17

U. S. C., ch. 10); Protecting Innovation and Art While Pre­

venting Piracy: Hearing before the Senate Committee on the Judiciary, 108th Cong., 2d Sess. (2004).

I do not know whether these developments and similar alternatives will prove sufficient, but I am reasonably certain that, given their existence, a strong demonstrated need for modifying Sony (or for interpreting Sony’s standard more strictly) has not yet been shown. That fact, along with the added risks that modification (or strict interpretation) would impose upon technological innovation, leads me to the conclu­ sion that we should maintain Sony, reading its standard as I

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have read it. As so read, it requires affirmance of the Ninth Circuit’s determination of the relevant aspects of the Sony question.

* For these reasons, I disagree with Justice Ginsburg, but * * I agree with the Court and join its opinion.