Morpheus and Grokster are not responsible for the activities of their users, the Central District of California ruled today in MGM Studios v. Grokster. Because their software is "capable of substantial non-infringing uses," like the Sony Betamax video recorder, the companies are neither contributorily nor vicariously liable for infringements committed by the software's users. Let's hope this ruling is the first of many, clearing the air for technological innovation.

Judge Wilson's ruling does not deny that some of the peer-to-peer services' users are infringing copyrights, but says that cannot outweigh the software's utility for other, non-infringing uses, including sharing of public domain and government documents (such as, I hope, this opinion itself) and distribution of media content whose copyright owners want the extra visibility and presence. We don't pull the plug on the library photocopier because some users will make infringing copies.

Liability for contributory infringement requires actual knowledge of the direct infringement "at a time when [defendants] can use that knowledge to stop the particular infringement" and active facilitation of the infringement. Generalized, after-the-fact awareness of infringement will not create liability for a technology distributor: "Defendants distribute and support software, the users of which can and do choose to employ it for both lawful and unlawful ends. Grokster and StreamCast are not significantly different from comapnies that sell home recorders or copy machines, both of which can be and are used to infringe copyrights."

The vicarious liability claim foundered on the similar "right and ability to supervise." "Defendants provide software that communicates across networks that are entirely outside Defendants control." The court properly rejected plaintiffs' suggestions that the companies could force "updates" on their users to enable supervision.

This decision is a happy contrast to yesterday's ruling against Verizon (RIAA v. Verizon), which gave copyright holders broad leeway to flood ISPs with demands for the identities of alleged copyright infringers. That decision, which Verizon is appealing, would compromise privacy and anonymity on the mere rubber-stamped say-so of any copyright claimant.