Inducement rule

The inducement rule is a test a United States court can use to determine whether liability for copyright infringement committed by third parties could be assigned to the distributor of the device used to commit infringement. Originating from patent law, the inducement rule test was articulated in Justice Souter's majority opinion in MGM Studios, Inc. v. Grokster, Ltd., a significant 2005 copyright and peer-to-peer Supreme Court case. The inducement rule holds that "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties." Justice Souter elaborated on the details of the test in his written opinion in Grokster, noting that liability could not be assigned through "mere knowledge of infringing potential or of actual infringing uses"; further, actions incident to the distribution of the product such as technical support would not "support liability in themselves." Instead, he wrote, "the inducement rule ... premises liability on purposeful, culpable expression and conduct." In the case of Grokster, the Court found evidence of such "expression and conduct" by noting that the two file-sharing software companies in question actively sought former Napster users, attempting to establish their respective services as alternatives once it became clear that Napster would cease to exist after judicial action; further, the companies refused to build filtering mechanisms into its software to reduce the infringing use of it by their users. Several parties with little interest to the outcome of the case have submitted amicus briefs to support the companies' position that creating such filters would be highly difficult, impractical, and non-effective (see 'Criticism'). Finally, the Court discovered evidence of a correlation between the infringing use of the software, and the companies' profits.