The Supreme Court appeared wary Tuesday of punishing peer-to-peer downloading services like Grokster for copyright violation. The Court was clearly divided, with several justices expressing frustration over the dearth of factual findings about the magnitude of infringement. Several justices voiced a concern that shutting down downloading might keep future innovators from developing a market for noninfringing uses -- a market that might not emerge until after the illegal uses establish the software's brand.
Details here from Tony Mauro of Legal Times via Law.com.