(Washington, DC)— Congresswoman Diane E. Watson (CA-33rd), chair of the Congressional Entertainment Industries Caucus, today applauded the Supreme Court's unanimous decision vacating the 9th Circuit Court of Appeals' ruling in MGM v. Grokster. 

It held that internet file-sharing services must be held responsible for intellectual property violation if they intend for their customers to use software primarily to swap songs and movies to circumvent copyright protections.

"Today's unanimous decision by the Supreme Court represents a great triumph for American creativity and innovation. File sharing companies that actively coax consumers into violating copyrights laws can no longer escape legal consequences under the guise of ‘fair use,’" stated Congresswoman Watson. 'They will no longer be able to hitch a free ride from the talent and hard work of our nation's creators," added Watson.

The Supreme Court agreed to hear MGM v. Grokster in December 2004 after the 9th Circuit Court’s ruling in favor of the defendants. At issue is whether a peer-to-peer technology company can be held financially liable for illegal activities taking place on its network. The Circuit Court, citing the 1984 Sony -Betamax decision, held that "substantial non-infringing uses" of Grokster exist and thus could not be shut down. The Supreme Court reversed the Circuit Court’s ruling, stating that "one who distributes a device with the object of promoting its use to infringe copyright. . . is liable for the resulting acts of infringement by third parties."

"Today's clear guidance from the Supreme Court will help enhance the effective enforcement of our nation's copyright laws and strengthen the public's respect for the value of intellectual property rights," said Congresswoman Watson. "I hope today's decision will send a message to all pirates that winking and nodding at digital theft will not be tolerated any more than other kinds of theft. I am confident that the lower courts will carefully apply this well-reasoned opinion in finding Grokster and other similar companies liable for actively inducing their customers into illegal use of their products."