Abstract
The principal theme of this paper is secondary liability ‐ to what extent should we hold those who cooperate in wrongdoing and illicit behavior accountable? We probe this question by considering a lawsuit filed by the entertainment industry against the file‐swapping services of Grokster and StreamCast. Our focus is on the legal and moral implications of this case. We argue that the courts, which have so far ruled in favor of the defendants, have misapplied the socalled Sony precedent for two reasons. The business model of these companies depends on copyright infringement with advertising (and revenue) volume directly proportionate to the level of that infringement. Also, Sony’s safe harbor should not apply if there is active inducement of infringement. The key ethical question is the extent to which technological innovators must design and write their code to deal with infringement ex ante. We argue that purveyors of peerto‐ peer technology are formal cooperators in wrongdoing if they deliberately configure their system to enable the illicit copying of copyrighted music and movie files. We also consider the conditions for unjustifiable material cooperation,
and propose these conditions as a normative standard especially relevant for software vendors.