The end of June brought sad news for the peer-to-peer (p2p) community, with the US Supreme Court finally deciding MGM v. Grokster. The decision, which holds p2p company Grokster liable for the unauthorized trading of copyrighted works on its networks, modifies the 1984 Sony Betamax case in which the US Supreme Court stated that manufacturers of devices capable of copyright infringement (such as VCRs and photocopiers) are not liable for such infringement, provided their devices also have legitimate uses. Grokster does not significantly change this 1984 decision, but instead carves the niche 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, going beyond mere distribution with knowledge of third-party action, is liable for the resulting acts of infringement by third parties using the device, regardless of the device's lawful uses."?
Instead of outlawing p2p networks, the ruling warns against improper p2p software marketing. Unfortunately, determining what might constitute the "?promotion of copyright infringement' is not made readily clear by the ruling, leaving p2p software companies on potentially unstable legal footing. Whether this uncertainty will result in a chilling effect on p2p software remains to be seen.