Great news -- a CA District Court has wisely ruled that P2P networks are not guilty of contributory copyright infringement.
In the opinion, the Court recognized that
there are substantial noninfringing uses for Defendants' software - e.g., distributing movie trailers, free songs or other non-copyrighted works; using the software in countrries where it is legal; or sharing the works of Shakespeare.
The "critical question," the opinion further reasons, "is whether Grokster and StreamCast do anything, aside from distributing software, to actively facilitate -- or whether they could do anything to stop -- their users' infringing activity." The Court found that transfers occur "without any information being transmitted to or through any computers owned or controlled by Grokster", and that "transfer is initiated directly between . . . users." The opinion thus distinguishes Grokster/Streamcast from Napster, and concludes that the "evidence of contributory infringement cited by Plaintiffs with respect to these Defendants is not material."
EFF has the opinion here. News.com has coverage here.