ISSUE:
Whether Grokster and StreamCast might be held accountable for copyright infringement by their users of peer-to-peer file-sharing software?
Whether the Sony Corp. v. Universal City Studios precedent, which shielded technology manufacturers from liability if their technology had significant non-infringing applications, applied to the Grokster and Streamcast case?
RULE:
A party who distributes a device intending to encourage its use for copyright infringement, as evidenced by plain expression or other affirmative steps intended to foster infringement, is liable for the resultant acts of infringement by third parties. A firm can be held accountable for contributory copyright infringement if it deliberately encourages or induces users to infringe copyright.