The precedent that was set by the ruling is that it is illegal for copyrighted material to be downloaded over the internet in any way. If a user uses software designed by someone to “steal” such material both the user and the software that is the catalyst are guilty of copyright infringement. This decision took the case Universal City Studios, Inc. et al. v. Sony Corporation of America Inc, and turned it upside down. In the Betamax case the plaintiff, Sony, stated that the Betamax recorder allowed a user to copy programming off the T.V. and thus was stealing copyrighted material. The court ruled in favor of Betamax but it took years and by that time VCR's were in over fifty percent of american households. This case was the precedent for copyright stealing via recording or downloading until the ruling on MGM vs Groakster.
Interesting that the Betamax case was basically a delay tactic for Sony to introduce the VHS system and in the time that the case went through the entire legal process VHS had over a fifty percent market share in American households.
Now if a person decides to download copyrighted material they are guilty of copyright infringement. Pamela Samuelson, has remarked, "The Sony decision is the most significant legacy of Justice Stevens in the field of intellectual property law and its significance is likely to continue in mediating disputes between copyright industries and creative information technology developers and users of information technology."
Sources: Harris, Paul. "Supreme Court O.K.'s Home Taping: Approve 'Time Shifting' for Personal Use." Variety (Los Angeles), 18 June 1984.
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