The Supreme Court has made its long-awaited ruling in the case between the music and movie industries and peer-to-peer file sharing services, with a unanimous decision against the P2P companies. The court ruled that the file-sharing networks can be held responsible for any illegal actions of their users, if the companies intended for their software to be primarily used for sharing files illegally. This ruling will no doubt be celebrated by the MPAA and RIAA and puts the future existence of American-based file sharing companies in great doubt.

"We hold 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, is liable for the resulting acts of infringement," wrote Justice David Souter.

The decision now sends the case back to the lower court, which had already ruled in favor of the file-sharing services, and said that the companies could not be sued. Souter said that the lower courts can find the companies responsible, based on how they marketed themselves or if they took action against copyright infringement within their networks. He wrote, "There is substantial evidence in MGM's favor on all elements of inducement."

Parties involved in the case have begun to weigh in on the decision. RIAA Chairman/CEO Mitch Bainwol said in a statement, "With this unanimous decision, the Supreme Court has addressed a significant threat to the U.S. economy and moved to protect the livelihoods of the more than 11 million Americans employed by the copyright industries.  The Supreme Court has helped to power the digital future for legitimate online businesses – including legal file sharing networks – by holding accountable those who promote and profit from theft. This decision lays the groundwork for the dawn of a new day – an opportunity that will bring the entertainment and technology communities even closer together, with music fans reaping the rewards."

Warner Music Group Chairman/CEO Edgar Bronfman, Jr. also released a statement, saying, "The most important message from today's historic decision is that progress and innovation do not have to come at the expense of recording artists, songwriters and the people who make their living in the entertainment industry.  As a music company, we fully understand that our ultimate success lies not in preventing people from getting what they want but in providing it to them in new and exciting ways.  We must strike a balance, one that nurtures technological innovation while at the same time protecting the very content that inspires innovation in the first place. We're grateful that the Supreme Court today unanimously agreed that distributors of software intended to promote copyright infringement are liable for the infringements committed by the users of such software.  This important decision will allow artists and the creative community to prosper side-by-side with the technology industry."

The Recording Artists' Coalition (RAC) has also spoken out in favor of the Court's decision. RAC President/Co-Founder Don Henley said in a statement, "By ruling against Grokster, the Supreme Court has vindicated the rights of artists, songwriters, and copyright owners. There is no more important case for the future of our business. These unauthorized P2P systems promote copyright infringement on an unprecedented scale. They make millions of dollars in advertising, but pay the artists nothing."