The case of MGM (backed by MPAA and RIAA) versus the peer-to peer file sharing Grokster is one of the most important copyright infringement cases in recent times.  The case came about because MGM thought that both Grokster.com and StreamCast.com were liable for copyright damages due to their supposed encouragement of illegally sharing movies.  Both Grokster and StreamCast were actively marketing particular software that aided in the downloading of both pirated movie and songs.  The two sites targeted the earlier ruling in the Supreme Court 1985 Betamax as their defense.  The Betamax ruling asserted that VCR manufacturers are not responsible for a VCR users who copy movies illegally.  The Supreme Court ended up ruling against Grokster and StremCast, saying that they could not hide behind a the 1985 Betamax ruling because unlike the VCR companies, they were actively promoting file sharing.  The fact that the Supreme Court wholly disregarded a past copyright ruling is poignant, because previous rulings on copyright legislature are often factored heavily into new decisions.  Two other points make this case specifically interesting.  Firstly, the Supreme Court highlighted the fact that although file sharing tools have the ability to be used illegally, the file sharing software itself and the activity of file sharing is not considered to be illegal.  Secondly, they state that the manufacturers of the specific file sharing products cannot be held responsible for how users choose to proceed once they have access to the software.  The one exception is when the manufacturer actively promotes or encourages infringement.  Ironically, it seems that although Hollywood thought that they scored hugely in this case, file sharers actually profited from this case as, ultimately, it was decided that file sharing itself is not illegal.