Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.
Supreme Court
545 U.S. 913 (2005)
Grokster and StreamCast (defendants) distributed free peer-to-peer file-sharing software that let users freely share copyrighted files, such as songs, without permission. Both companies actively promoted the software's ability to download copyrighted works for free, responded to user requests for help doing exactly that, and specifically marketed their products to former users of Napster, a service already well known for facilitating copyright infringement — while doing nothing to limit the infringing use taking place. Metro-Goldwyn-Mayer and other copyright holders (plaintiffs) sued for copyright infringement; the district court granted summary judgment for Grokster, and the court of appeals affirmed, relying on Sony v. Universal City Studios' rule that a technology capable of substantial noninfringing uses (like the VCR) doesn't create secondary liability.
Whether a company that distributes a product capable of copyright infringement is liable for that infringement by a third party when the company markets the product as capable of infringing.