IsoHunt has been fighting major film studios since 2006. It's a search engine that helps users find files on peer-to-peer networks using the BitTorrent file-sharing software. The company's doom was sealed this year when an appeals court upheld a summary judgment ruling finding the site liable for helping its users pirate copyrighted works.
The court's opinion was based on a landmark 2005 Supreme Court decision finding that the file-sharing company Grokster was liable for its users' infringement. In that case, both sides wanted the Supreme Court to rule on whether making a product that was overwhelmingly used for infringing purposes could itself be the basis for copyright liability.
But lots of legitimate media technologies have both infringing and non-infringing uses. Drawing a line based on the ratio of the two would have been a tricky proposition. So the Supreme Court took a different path. Pointing to ample evidence that Grokster had encouraged its users to infringe copyrights, the Supreme Court fashioned a new "inducement" theory of copyright liability. Under this theory, if you build a product that can be used for piracy and you encourage your users to use it for illicit purposes, then you can be held liable for their infringement.
Critics warned that the vagueness of this rule would open the floodgates to frivolous lawsuits against technology innovators. But that hasn't happened for a simple reason: It's easy to avoid running afoul of the inducement standard. If an entrepreneur is sincerely not trying to profit from infringement, then she won't encourage her customers to infringe, and so plaintiffs won't be able to find evidence of her doing so.
In contrast, the court found clear evidence that isoHunt was trying to profit from infringement. For example, the 9th Circuit Court of Appeals wrote that for a time, "isoHunt prominently featured a list of 'Box Office Movies,' containing the 20 highest-grossing movies then playing in U.S. theaters. When a user clicked on a listed title, she would be invited to 'upload [a] torrent' file for that movie." Since the top-grossing movies are almost always copyrighted, this feature shows clear evidence of infringing intent.
In other cases, the founder of isoHunt "posted numerous messages to the isoHunt forum requesting that users upload torrents for specific copyrighted films; in other posts, he provided links to torrent files for copyrighted movies, urging users to download them."
Legitimate entrepreneurs wouldn't have behaved this way. The inducement test gives the courts an easy way to distinguish legitimate entrepreneurs who happen to have their products used for piracy from those who intend from the outset to profit from copyright infringement. And the demise of isoHunt is another sign of that standard working well.