As Hollywood and record labels cheered Monday’s Supreme Court decision in the MGM v. Grokster case, technology companies and consumer groups warned that the ruling will chill innovation and result in more gadget-killing lawsuits.
In a unanimous ruling, the justices said that Grokster and StreamCast Networks, the company behind the Morpheus network, can be held liable for copyright infringement if they encourage customers to illegally share copyright movies and music. The Supreme Court returned the case to the district court where the two software companies will be tried for inducing infringement.
But while entertainment companies touted the victory as a crystal clear decision about right and wrong business practices, technology groups said they are left with a murky, unclear standard of what it means for a company to encourage, or induce, its customers to infringe copyright, and this will lead to more litigation. [more @ www.wired.com]