File-sharing software 'legal'

A federal appeals court has upheld a controversial court decision that said file-sharing software programs such as Grokster or Morpheus are legal.

Following the lead of a lower-court decision last year, the 9th US Circuit Court of Appeals in Los Angeles said on Thursday that peer-to-peer software developers were not liable for any copyright infringement committed by people using their products, as long as they had no direct ability to stop the acts.

The ruling means that companies that write and distribute peer-to-peer software can't be shut down because of the actions of their customers. It did not say file-trading itself is legal, and lower courts in the United States have said individual computer users are breaking the law when they trade copyrighted files without permission. But the ruling does lift the cloud of potential liability from defendants Grokster and StreamCast Networks, as well as from many of their rivals.

The decision marks a substantial - if not entirely unexpected - setback for the big record labels and movie studios, which have tried hard to win legal rulings that would clamp down on anarchic peer-to-peer networks such as Kazaa or eDonkey.

John Borland writes for News.com