Facts of the case

On March 29, the Supreme Court listened to arguments in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. The Supreme Court ruled that peer-to-peer file sharing companies could be liable for copyright piracy used over their networks. This was a huge win for record, software and movie companies. It was a unanimous decision and the 9 justices wanted to be clear that companies building their business on file sharing and swapping would be liable for any copyrighted material being transmitted over their system.

"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," Justice David Souter wrote in the majority opinion.

The ruling gives movie and music companies’ immediate immunity on existing lawsuits being held by file sharing companies. It will also increase revenues for legal downloading sites such as iTunes and Yahoo.

'We are confident that it will be proven that Morpheus does not promote or encourage copyright infringement," said StreamCast Chief Executive Officer Michael Weiss. "We're staying in this for the fight. We're going to continue to innovate and come out with new products."

To this day some other file sharing websites still continue to offer peer-to-peer software despite the fact that their primary use is to pirate copyrighted music, software, and movies.