Souter specifically referred to the VCR case, Sony Corp. vs. Universal City Studios, in stressing the differences between Sony's generalist marketing and StreamCast's specific promotion as a Napster alternative.
The Court ruled that "the only conceivable basis for imposing liability was on a theory of contributory infringement arising from its sale of VCRs to consumers with knowledge that some would use them to infringe."
Three factors enhanced Grokster's and StreamCast's liability, the Supreme Court found: the companies aimed advertising at satisfying a known source of demand; they failed to develop any type of filtering tools to remove copyrighted content from networks; and the companies sold secondary banner ads to users of their software in order to increase revenue streams and increase the user base.
Thus, "the unlawful objective is unmistakeable," Souter ruled.
The only dissent was a disagreement between Justices Ruth Bader Ginsburg and Steven Breyer regarding the amount of modification necessary for the original Sony ruling.
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