As I said in my post below I wasn't familiar with the particular facts of the case. It appears that Grokster pretty much did come close to my "download muz@k free d00dz" line below. Thats what I get for ranting before reading... Twenty lashes with a wet noodle for me.
From the Yin Blog:
Here're the key facts from the opinion:
Grokster and StreamCast concede the infringement in most downloads . . . and it is uncontested that that they are aware that users employ their software primarily to download copyrighted files. . . . From time to time, moreover, the companies have learned about their users' infringement directly, as users who have sent e-mail to each company with questions about playing copyrighted movies they had downloaded, to which the companies responded with guidance.
Grokster and StreamCast are not, however, merely passive recipients of information about infringing use. The record is replete with evidence that from the moment [they] began to distribute their free software, each one clearly voiced the objective that recipients use it to download copyrighted works, and each took active steps to encourage infringement.
I didn't follow this case, but it doesn't seem all that surprising that it was 9-0 decision against Grokster and StreamCast. If the record labels and movie studios can prove the facts asserted in the quoted paragraph (some of which are uncontested), it shouldn't matter that the file-sharing software can have legitimate uses, as argued by Grokster.
Yep, this is just wrong on any level. That being said, there's nothing about P2P technology specifically that encourages or discourages copyright infringement. Its just bit transfer after all.
It looks like the case is split on 3-3 grounds as to whether "absent a demonstration of intent to affirmatively encourage infringement -- if a product is "capable of substantial or commercially significant noninfringing use," its purveyor cannot be held liable" (H/T IP Central)
Basically on the question of P2P technology itself, the court is decidely split on potential culpability.
Larry Kudlow is going to be discussing on his CNBC program this evening.