Grokster Press Releases

Supreme Court Grokster Decision on Internet File-Sharing Expected, According to Orrick, Herrington & Sutcliffe LLP

LOS ANGELES–(BUSINESS WIRE)–June 21, 2005–The Supreme Court is expected to issue its ruling on the controversial Grokster lawsuit about Internet file-sharing as early as today, and Christopher Ruhland, an Orrick litigator in Los Angeles who specializes in intellectual property in the media and entertainment industries, predicts a titanic impact whichever way the Court rules.

“The Court’s decision will have enormous consequences for copyright owners and for those who currently thrive off of copyright infringement,” said Ruhland, who previously worked for The Walt Disney Co., one of the plaintiffs in the case. “What is at stake is the value of the rights afforded by the Copyright Act.”

The issue in the case, brought by MGM Studios and other movie studios and record companies, is whether the distributors of file-sharing software such as Grokster can be held responsible for copyright infringements committed by those who use their programs. In August 2004, the Ninth Circuit Court of Appeals in San Francisco held that Grokster is not liable for copyright infringement. The court ruled that because Grokster claims it does not have actual knowledge of what its users are doing and cannot stop its users from infringing, it cannot be held liable.

“The studios and record companies are asking the Supreme Court to plug a significant legal hole created by the lower courts,” said Ruhland. “That hole allows Grokster and others to contribute to massive online infringement, and to escape liability as long as they stick their heads in the sand, so that they do not ‘know’ that their users are trading infringing copies of movies and music. The reality is that certain software programs were designed to allow users to commit copyright infringement, and that is exactly how those programs are being used.”

Entertainment companies already have stepped up efforts to file lawsuits against Internet users who distribute movies and music illegally, and Ruhland said they may have to do more if the Supreme Court rules against them. “If the Supreme Court rules that Grokster’s conduct is legal, that will encourage others to design similar systems online,” Ruhland said. “The result will be an escalation of the free-for-all in the trade of unlawful copies of movies and music that already persists.”

About Orrick

Orrick, Herrington & Sutcliffe LLP is an international law firm with approximately 700 lawyers in North America, Europe, and Asia. The firm focuses on litigation, complex and novel finance, and innovative corporate transactions. Orrick clients include Fortune 100 companies, major industrial and financial corporations, commercial and investment banks, high-growth companies, governmental entities, start-ups, and individuals. The firm’s 15 offices are located in New York, Washington, D.C., San Francisco, Silicon Valley, Sacramento, Los Angeles, Orange County, Pacific Northwest, London, Milan, Moscow, Paris, Rome, Tokyo, and Taipei.

Orrick was named the number-two IP defense firm by American Lawyer magazine.

Contacts

Orrick, Herrington & Sutcliffe LLP

Christopher S. Ruhland, 213-612-2274

Tim Larimer, 212-506-5170

When: 12 Noon EDT on the day of the decision. The Court has already scheduled opinion announcements for 10:00a on June 20th, 23rd, 27th, and 30th, and may schedule additional days. If you are a member of the media and wish to phone into the conference, get in touch with one of the contacts listed below.

Who: Richard Taranto argued the case on behalf of Grokster and StreamCast ( Morpheus )

StreamCast CEO Michael Weiss and General Counsel Matthew Neco

Fred von Lohmann and Cindy Cohn of the Electronic Frontier Foundation

Charles Baker of Porter & Hedges, attorney for StreamCast Networks

Michael Page of Keker & Van Nest, attorney for Grokster

Adam Eisgrau, Executive Director of P2PUnited

Gigi Sohn, President and Co-Founder of Public Knowledge

Edward Black, President and CEO of CCIA

Gary Shapiro, President and CEO of CEA

Why: In a case now before the United States Supreme Court about when if ever technology makers will be legally liable for the infringements committed by the users of their products, and whether entertainment companies will be able to slow or dictate the course of technology development, the makers of the Morpheus and Grokster Peer-to-Peer file sharing software are being sued by 28 of the world’s largest entertainment companies.

Background: The entertainment companies lost their case in District Court, and then lost again on appeal to the Ninth Circuit Court of Appeals. The lower court rulings were based, in part, on the Supreme Court’s landmark decision in the 1984 Sony Betamax case, which determined that Sony was not liable for copyright violations by users of the Betamax VCR.

Contacts:

Art Brodsky

Communications Director

Public Knowledge

abrodsky@publicknowledge.org

Annalee Newitz

Policy Analyst

Electronic Frontier Foundation

annalee@eff.org

Brian O’Neal

Senior Director of Communications

StreamCast Networks