In the Court's 9-0 opinion, Justice David Souter wrote 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." The Supreme Court adopted an active inducement standard as advocated by IEEE-USA in its amicus brief filed with the Court. The decision imposes liability on companies that actively encourage or "induce" customers through words and deeds to infringe on copyrighted material, which focuses legal scrutiny on the company's infringing conduct rather than restricting its technology.
According to Justice Souter, the active inducement rule "does nothing to compromise legitimate commerce or discourage innovation having a lawful promise." He added that patent law's commerce doctrine, now codified, "leaves breathing room for innovation and a vigorous commerce."
Innovation will not be stifled, according to Justice Souter, who said: "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...The inducement rule...premises liability on purposeful, culpable expressions and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise."
IEEE-USA's Greenberg noted: "Active inducement has been part of patent law for more than 100 years, and has stood the test of time. In all that time, the sky has not fallen for technology companies in patent law," and it can be assumed "that a parade of 'horribles' will not follow under copyright principles."
To read the Court's opinion, see http://wid.ap.org/scotus/pdf/04-480P.ZO.pdf.
To view IEEE-USA's amicus brief in the case, go to http://www.ieeeusa.org/policy/POLICY/2005/MGMvGrokster.pdf.
For more on inducement, visit IEEE-USA's website at http://www.ieeeusa.org/policy/issues/INDUCE/index.html.
IEEE-USA is an organizational unit of the IEEE. It was created in 1973 to advance the public good and promote the careers and public policy interests of the more than 220,000 technology professionals who are U.S. members of the IEEE. The IEEE is the world's largest technical professional society. For more information, go to http://www.ieeeusa.org.