The cases construing Grokster are beginning to trickle out. One from the Northern District of Illinois, involving the Monotype Corporation and Bitstream, Inc., is interesting because the direct infringement claim was adjudicated on April 21, 2005 (pre-Grokster)(2005 U.S. Dist. LEXIS 7410), while the third party liability claim was adjudicated on July 12, 2005, apres Grokster (276 F. Supp.2d 877). At issue in Monotype was Bitstream's "True Doc" software program, which includes a "Character Shape Recorder" feature. That feature's purpose is to create a file format which, when transmitted with a document, permits the replication of typeface designs in the document regardless of whether the recipient of the document has those designs on his or her computer.
There is no copyright in typeface designs even though they qualify as original works of authorship because Congress, in 1976, chose not to extend protection. (This is found in the House Committee report, so if you refuse to look at legislative history, you'll miss it.). The reason for the exclusion was opposition from book publishers and authors who were concerned about injunctions and damages that might obtain where, unbeknownst to them, a printer used what turned out to be an infringing typeface design. A mandamus action against the Register of Copyrights was rejected by the Fourth Circuit in 1978. (Eltra v. Ringer).
But this doesn't mean that computer programs, like Adobe's, for example, that generate font designs when printing out documents, aren't protectible as a set of statements or instructions; they are, if original. For awhile in 1990 or 1991, the Copyright Office had a policy of requiring registrants of computer programs to disclaim the typeface, but after a real battle in which I and the "liberals" (read everyone other than the then General Counsel) prevailed, the policy was abandoned in favor of an amendment to the Office's regulations which state that "typeface qua typeface" is not protectible. And that gets us to Monotype v. Bitstream, where the claim, at least purportedly, was in the software, not the typeface.
In the April opinion, the court noted that Monotype did not present any evidence that Bitstream's "Character Shape Recorder" copied any of Monotype's programs, but did any of Bitstream's end-users? Monotype pointed to web tutorials; Bitstream claimed these uses were fair uses and that its product had substantial noninfringing uses. First of all, True Doc was used primarily with Bitstream's own fonts and those of others licensed to Bitstream. Monotype pointed to advertising by Bitstream that the program could be used with "any" fonts. Being in the Seventh Circuit, Aimster was the standard employed, and under that standard Judge St. Eve found a genuine issue of material fact on contributory infringement, but none on vicarious liability, which she decided in favor of Bitstream.
Fast forward to July, apres Grokster. The court found no evidence of direct infringement, which could have ended the matter, but Judge St. Eve went on to discuss the contributory infringement claim, relying on a mix of Grokster and Aimster. The number of noninfringing uses were found to vastly outweigh any potential infringing uses, and with an absence of any evidence of encouragement of infringement. Bitstream was found to have made some efforts to reduce potential infringement. End result: no contributory infringement.
Next up, the new Grokster "intentional inducement" theory, as it was described by Judge St. Eve; the theory was found not to apply to the facts because of the lack of any knowledge of any infringement, much less "purposeful, culpable expression and conduct." The advertisements might have qualified, but were construed as referring to Bitstream's own fonts and those of its licensees. Grokster was distinguished as involving a "targeted audience"where defendants took no steps to mitigate infringement and where defendant benefited from the infringement.