Among the points one can make about the complaint is the careful separating out of three distinct theories for liability: contributory infringement, vicarious liability, and the new Grokster inducement. Ms. Forrest's attention to detail is so refined that in making out the contributory infringement claim, she omits the word "inducement," even though, as noted below, it was, pre-Grokster, one of the trilogy of elements of a contributory infringement action. We are in a new era and this complaint reflects that era.
I happen to think the new era sucks, but it is here and we had best come to grips with it. The LimeWire case is likely to provide the inducement for that waking up. Aside from what I regard as the Supreme Court's insitutional irresponsibility, my objection to the Grokster opinion (which is not a defense of Grokster the company), is that it only added to the conceptual morass begun with Sony by creating a new, third category of third-party liability, and without any perceived need for it by the parties, Congress, or anyone else. It was, I believe, merely a way to paper over the court's inability to do the job it took upon itself: determine how to apply Sony to the Internet. When the Court shirked that responsbility, it apparently felt it too had to something to show it was tough on pirates (you're not alone Mr. Attorney General!), hence the inducement theory.
This new inducement theory is not a species of vicarious liability or contributory infringement, although at one point Justice Souter’s "majority" opinion referred to contributory infringement: “One infringes contributorily by intentionally inducing or encouraging direct infringement … .” This passage evokes the classic formulation of contributory liability in copyright cases, pre-dating Sony: “[O]ne who with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.” By contrast, the new inducement theory focuses on intent, as Justice Souter explained:
Sony’s rule limits imputing culpable intent as a matter of law from the characteristic or uses of a distributed product. But nothing in Sony requires courts to ignore evidence of intent if there is such evidence, and the case was never meant to foreclose rules of fault-based liability derived from the common law.FN10 …Thus, where evidence goes beyond a product's characteristics or the knowledge that it may be put to infringing uses, and shows statements or actions directed to promoting infringement, Sony's staple-article rule will not preclude liability.
I regard the intent of this approach to be solely to eliminate the staple article of commerce defense available to contributory infringement, a defense the Court had itself judicially legislated into the Copyright Act in Sony, but apparently found inconvenient in Grokster. The Court’s sop to Sony in footnote 12 does not ameliorate this, and instead adds to Grokster’s conceptual illegitimacy:
FN12 Of course, in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the Sony safe harbor.
Sony surely intended that its machine be used for infringing purposes and took no steps to prevent those uses. Moreover, since intent is not an element of contributory infringement, it is baffling to see why it should play a role in carving out an exception from such infringement. But no matter, I would be surprised if Ms. Forrest does not argue that under Grokster, the staple article of doctrine doesn't apply, so forget about whether there are substantial noninfringing uses; their existence is irrelevant.
Of course (in the way the Supreme Court uses that phrase), plaintiffs in LimeWire have also pled contributory infringement so the issue will come into play there, but as Grokster shows, you only need one theory to win, and it can be a new one the Court makes up or impresses from another field of law: tag, you're it, you lose!
Grokster and the LimeWire complaint do raise important issues of inducement: how does the inducement in contributory infringement differ from the inducement in the new inducement theory: are they different, and if not, what does the new theory add (trick question, the answer is what it takes away:the staple article of commerce defense). And then there is "intent," one of Justice Souter's favorite words: what type of intent must be shown before the court will require defendant to take affirmative steps to prevent infringement under an inducement theory: is it an intent to facilitate infringement coupled with a design that doesn’t attempt to control infringement, or is it more like classic willfulness in both the intent to facilitate infringement and in designing a system that can’t control infringing uses? The majority made no effort to answer these important questions, perhaps because Footnote 12 was intended to be less a formulation of a legal principle and more a political concession to keep Justices Breyer, Stevens, and O’Connor on board for the majority opinion, while leaving them free to write their own concurring opinion that takes a different path.
A few other points about the LimeWire complaint. There is a common law, pre-1972 Naxos claim, and what seems to me a preempted claim for unfair competition. The prayer for relief discretely asks for "injunctive" relief, meaning permanent injunctive relief, since the complaint acknowledges LimeWire has been at it since 2000.