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The Ninth Circuit Court of Appeals has ruled that Grokster and StreamCast Networks are not legally responsible for users who swap copyrighted content through their file-sharing software.

The unanimous three-judge panel upheld a lower court ruling that dismissed the bulk of the lawsuit brought by movie studios and record labels. The decision is pretty serious blow to the legal tactics movie studios and record labels have been using to battle piracy. Coverage by the AP and Reuters is available at CBSNew.com and CNN/Money.

The court rightly noted that the software firms were simply providing software that allows users to share information over the Internet, regardless of whether that shared information was copyrighted.

“The technology has numerous other uses, significantly reducing the distribution costs of public domain and permissively shared art and speech, as well as reducing the centralized control of that distribution,” Judge Sidney R. Thomas noted in the court’s written decision.

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