The appeal is expected to focus on the interpretation of a 1980s Supreme Court decision on Sony's Betamax video recorder, which, at the time, had been accused of infringing TV and movie studios' copyrights. Sony won that case because the machine had significant non-infringing uses.
The suit, currently before the Supreme Court, relates to a copyright infringement action brought by the entertainment industry against two file-sharing service providers – Streamcast Networks Inc., the company behind the Morpheus file-sharing software, and Grokster Ltd.
The suit accused the two firms of providing the means whereby countless numbers of file-swappers illegally copy and share copyrighted music, software and films over the internet, but was dismissed by the Ninth Circuit Court of Appeals in August on the grounds that, while the companies provide the software used by file-sharers to swap illegally copied digital files, the software can also be used for legitimate purposes.
Judge Sidney R Thomas ruled, in the appeal, "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 centralised control of that distribution."
The Court was also hesitant to extend the scope of copyright law to cope with developing new technologies, as the entertainment industry was urging.
The industry then urged the Supreme Court to hear the case, and consequently to re-visit the Betamax decision, describing the suit in its appeal filing as "one of the most important copyright cases ever to reach this Court. Resolution of the question presented here will largely determine the value, indeed the very significance, of copyright in the digital era."
The Supreme Court has now granted the request, with the appeal due to be heard in March and a ruling expected by July.
"We appreciate that the Supreme Court has agreed to review this case," said Mitch Bainwol, Chairman and CEO of the Recording Industry Association of America. "There are seminal issues before the Court – the future of the creative industries and legitimate internet commerce. These are questions not about a particular technology, but the abuse of that technology by practitioners of a parasitical business model."
"The copyright law principles set out in the Sony Betamax case have served innovators, copyright industries, and the public well for 20 years," said Fred von Lohmann, senior intellectual property attorney at the Electronic Frontier Foundation (EFF), who argued Streamcast's case before the Ninth Circuit. "We at EFF look forward to the Supreme Court reaffirming the applicability of Betamax in the 21st century."