The 9th Circuit decided the very very long awaited Grokster case today. The decision is MGM et. al. v. Grokster, 03-55894 (9th Cir. August 19, 2004).
C.E. Petit of Scrivener's Error has what seems like a sensible take on it:
It does not, contrary to headlines that I have already seen, mean that “file-sharing software is legal.” It means that the plaintiff record companies didn't (not necessarily couldn't—just didn't) establish intent in the same way as was done in Napster. It also creates an extremely fine line between providing a tool used to infringe, which is subject to apparently more-searching analysis, and providing a forum used to infringe, as the record indicates Napster and AOL did, or at least did enough to require a jury to make a definitive determination. Of course, a tool may well be meaningless without the forum. That, however, is for another time; as Judge Thomas emphasized, the tool alone is not unlawful unless the tool itself constitutes an infringement. Think of this as Internet “gun control”: a handgun is not per se unlawful to possess, unless it is actually used in a crime or is a weapon specifically prohibited (such as a fully automatic weapon).
What this really points out is that Congress has done a piss-poor job of drafting the Copyright Act so that it is not held hostage by changing technology.