Legal experts said it was the most important case on the Internet age. The court unanimously ruled that Internet file-sharing services can be held legally responsible if they distribute products that permit illegal downloads. But, the court added, they will be held liable only if their intent is to encourage breaking the law.

The court stressed that peer-to-peer file sharing, which permits people to exchange music, films and other forms of digital information, can be legal if the intent of the distributor is not to encourage illegality.

'If the object of distributing a device is to infringe copyright then this is illegal'.

The unanimous ruling of the US court means the closely watched case of MGM v Grokster is sent back to the lower court, which had ruled in favor of file-sharing services Grokster and StreamCast.

At issue in the Grokester case was whether the file-sharing services should be held liable even if they have no direct control over what millions of online users are doing with the software they provide for free.

This may not be the last word on Internet file-sharing; a key US Senate committee said yesterday that it would review the ruling for "its impact on copyright law and innovation."

FT
28.6.05