[MGM and the other plaintiffs—including the Recording Industry Association of America, the Motion Picture Association of America and a class of 27,000 music publishers and songwriters (MGM)—brought this suit against Grokster, Ltd. and StreamCast Networks (defendants/respondents) alleging vicarious and contributory copyright infringement for distributing peer-to-peer file-sharing software. Peer-topeer networks allow computers to communicate directly with each other, not through central servers. Although such networks can be used to share any type of digital file, recipients of respondents’ software have mostly used them to share copyrighted music and video files without authorization. According to MGM, over 90% of the material exchanged using respondents’ file-sharing software is copyrighted material. MGM contends that respondents contribute to this infringement by making the file-sharing software available to the public. Billions of files are shared across peerto-peer networks each month. Respondents are aware that users employ their software primarily to download copyrighted files, although the decentralized networks do not reveal which files are copied, and when.

   MGM presented a significant amount of evidence that when respondents began to distribute their free software, each of them clearly voiced the objective that recipients use the software to download copyrighted works and took active steps to encourage infringement. After the file-sharing service Napster was sued by copyright holders for facilitating copyright infringement, both respondents promoted and marketed themselves as Napster alternatives. They receive no revenue from users, but instead generate income by selling advertising space, then streaming the advertising to their users. As the number of users increases, advertising revenues increase. There is no evidence that either respondent made an effort to filter copyrighted material from users’ downloads or otherwise to impede the sharing of copyrighted files.

   The District Court held that those who used the software to download copyrighted media files directly infringed MGM’s copyrights, but the court nonetheless granted summary judgment in favor of Grokster and StreamCast as to any liability arising from distribution of their software. The Court of Appeals affirmed, holding that distribution of a commercial product capable of substantial noninfringing uses could not give rise to contributory liability for infringement unless the distributor had actual knowledge of specific instances of infringement and failed to act on that knowledge.]

   The argument for imposing indirect liability in this case is, however, a powerful one, given the number of infringing downloads that occur every day using StreamCast’s and Grokster’s software. When a widely shared service or product is used to commit infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, the only practical alternative being to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement. [Citation.]

   One infringes contributorily by intentionally inducing or encouraging direct infringement, [citation], and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it, [citation]. * * *

   One infringes contributorily by intentionally inducing or encouraging direct infringement, [citation], and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it, [citation]. * * *

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   * * * [W]here an article is ‘‘good for nothing else’’ but infringement, [citation], there is no legitimate public interest in its unlicensed availability, and there is no injustice in presuming or imputing an intent to infringe, [citation]. Conversely, the doctrine absolves the equivocal conduct of selling an item with substantial lawful as well as unlawful uses, and limits liability to instances of more acute fault than the mere understanding that some of one’s products will be misused. * * *

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   * * * Evidence of ‘‘active steps * * * taken to encourage direct infringement,’’ [citation], such as advertising an infringing use or instructing how to engage in an infringing use, show an affirmative intent that the product be used to infringe, and a showing that infringement was encouraged overcomes the law’s reluctance to find liability when a defendant merely sells a commercial product suitable for some lawful use, [citations].

   * * * 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. We are, of course, mindful of the need to keep from trenching on regular commerce or discouraging the development of technologies with lawful and unlawful potential. Accordingly, * * * mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability. Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise.

   The only apparent question about treating MGM’s evidence as sufficient to withstand summary judgment under the theory of inducement goes to the need on MGM’s part to adduce evidence that StreamCast and Grokster communicated an inducing message to their software users. The classic instance of inducement is by advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations. MGM claims that such a message is shown here. * * *

   * * * Here, the * * * record is replete with * * * evidence that Grokster and StreamCast * * * acted with a purpose to cause copyright violations by use of software suitable for illegal use. * * *

   Three features of this evidence of intent are particularly notable. First, each company showed itself to be aiming to satisfy a known source of demand for copyright infringement, the market comprising former Napster users. * * *

   Second, this evidence of unlawful objective is given added significance by MGM’s showing that neither company attempted to develop filtering tools or other mechanisms to diminish the infringing activity using their software. While the Ninth Circuit treated the defendants’ failure to develop such tools as irrelevant because they lacked an independent duty to monitor their users’ activity, we think this evidence underscores Grokster’s and StreamCast’s intentional facilitation of their users’ infringement.

   Third, there is a further complement to the direct evidence of unlawful objective. It is useful to recall that StreamCast and Grokster make money by selling advertising space, by directing ads to the screens of computers employing their software. As the record shows, the more the software is used, the more ads are sent out and the greater the advertising revenue becomes. Since the extent of the software’s use determines the gain to the distributors, the commercial sense of their enterprise turns on high-volume use, which the record shows is infringing. This evidence alone would not justify an inference of unlawful intent, but viewed in the context of the entire record its import is clear. 

   The unlawful objective is unmistakable. 

   In addition to intent to bring about infringement and distribution of a device suitable for infringing use, the inducement theory of course requires evidence of actual infringement by recipients of the device, the software in this case. As the account of the facts indicates, there is evidence of infringement on a gigantic scale, and there is no serious issue of the adequacy of MGM’s showing on this point in order to survive the companies’ summary judgment requests. * * *

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   There is substantial evidence in MGM’s favor on all elements of inducement, and summary judgment in favor of Grokster and StreamCast was error. On remand, reconsideration of MGM’s motion for summary judgment will be in order.

   The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.

   It is so ordered.