The Ninth Circuit Court of Appeals has upheld the opinion that said that Grokster and Morpheus were not liable for the contributory and vicarious copyright infringement of those using their software (including use of the Kazaa technology but not absolving Kazaa the company), reversing the apparent trend to the contrary in the Aimster and Napster opinions. 

The Court is concise in its holding (and introduction): “This appeal presents the question of whether distributors of peer-to-peer file-sharing computer networking software may be held contributorily or vicariously liable for copyright infringements by users. Under the circumstances presented by this case, we conclude that the defendants are not liable for contributory and vicarious copyright infringement and affirm the district court’s partial grant of summary judgment.”

As an aside, I was interested to see the Court cite to Yochai Benkler’s excellent paper on peer production, generally cited for other propositions, in fn. 2, page 11732: “This [the Court’s statement in the opinion’s text] is an extremely simplistic overview of peer-to-peer file-sharing networks. There are a number of more complete descriptions available.  See, e.g., Yochai Benkler, Coase’s Penguin, or, Linux and The Nature of the Firm, 112 Yale L.J. 369, 396-400 (2002); …”