## Facts

- Copyright owners sued distributors of peer-to-peer file-sharing software alleging secondary liability for widespread infringement by users.
- After earlier defense summary judgment and affirmance, the Supreme Court recognized inducement liability for distributing a product with the object of promoting infringement, shown by clear expression or affirmative steps.
- On remand, settlements left StreamCast Networks, Inc. as the only remaining defendant.
- StreamCast distributed the Morpheus application, which enabled peer-to-peer file sharing; the record showed predominant unauthorized sharing of copyrighted works on the network.
- Plaintiffs submitted evidence that most files offered and most download requests on StreamCast’s network were infringing or highly likely infringing.
- Plaintiffs produced evidence StreamCast sought to attract former Napster users, including advertising referencing Napster’s shutdown and using technology compatible with Napster-related protocols.
- Evidence indicated StreamCast understood infringement was pervasive and that user traffic driven by infringing content generated advertising revenue.
- StreamCast did not implement or seriously investigate filtering or other measures to reduce infringement, despite awareness such tools existed.
- Plaintiffs moved for summary judgment on inducement liability; StreamCast requested a continuance under Rule 56(f) to seek additional discovery.

## Issues

1. Whether undisputed evidence established that StreamCast induced copyright infringement under the Supreme Court’s inducement standard.
2. Whether StreamCast was entitled to a Rule 56(f) continuance to conduct further discovery before summary judgment was decided.

## Decision

- The court granted plaintiffs’ motion for summary judgment on liability against StreamCast.
- The court held that no reasonable jury could find StreamCast lacked intent to induce infringement, given its marketing, technical choices, and business strategy tied to infringing use.
- The court denied StreamCast’s Rule 56(f) motion, concluding further discovery would not create a genuine dispute of material fact on inducement.
- The ruling resolved liability and left remedies (including injunctive relief and damages) for later proceedings.

## Legal Principles

- A distributor is secondarily liable for inducement when it distributes a product with the object of promoting its use to infringe copyright, shown by clear expression or other affirmative steps to encourage infringement.
- Inducement liability is distinct from the rule that products capable of substantial lawful use are not automatically barred from secondary liability; substantial lawful uses do not preclude liability where intent to cause infringement is proven.
- Intent may be inferred from targeted marketing to known infringing audiences, design and operational choices aimed at facilitating infringing use, and corroborating conduct consistent with encouraging infringement.
- A defendant seeking a Rule 56(f) continuance must show that additional discovery is likely to produce material facts creating a genuine issue for trial; courts may deny continuances where the record already contains dispositive evidence on the controlling issue.

## Conclusion

The court held StreamCast liable for inducing user infringement through Morpheus based on evidence of purposeful efforts to attract infringing users and to profit from infringement, and it denied additional discovery because it would not alter the dispositive intent showing.


Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 454 F. Supp. 2d 966 (C.D. Cal. 2006)