At the end of the last term,
the Supreme Court held that Grokster could be held liable for copyright infringement, so long as MGM could prove Grokster's intent during a subsequent trial:
We hold 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.
Today, Grokster decided not to undergo such analysis,
conceding defeat:
Grokster Ltd., a leading developer of Internet file-sharing software popular for stealing songs and movies online, agreed Monday to shut down operations to settle a landmark piracy case filed by Hollywood and the music industry, The Associated Press has learned.
The surprise settlement permanently bans Grokster from participating directly or indirectly in the theft of copyrighted files and requires the company to stop giving away its software. Settlement details were to be disclosed to a federal judge later in the day in Los Angeles.
Grokster's Web site was changed to display a message that its file-sharing service was illegal and no longer available. "There are legal services for downloading music and movies," the message said. "This service is not one of them."
... Grokster's brand will survive. A new fee-based version of its software, which will permit only legal downloads, will be available within 60 days from a new parent organization, according to one executive involved in the deal. This executive spoke only on condition of anonymity because the sale of Grokster's assets is pending.