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The US Supreme Court will today commence hearing the latest round in the battle between MGM Studios and Grokster, which could rule the use of peer-to-peer (P2P) applications illegal.
The case looks specifically at whether companies that develop P2P software are liable to prosecution should it be used to transfer copyrighted material illegally.
The defendants - Grokster and StreamCast Networks - have already won the first two rounds, the courts ruling in their favour in both the original case in 2003, and the appeal in August 2004.
Should the Supreme Court uphold the previous two decisions it would then take an act of Congress to outlaw existing P2P technologies, which would prove a significant blow to Hollywood studios and record companies currently waging a war on internet piracy.
Conversely, should the court overturn the previous rulings and find against Grokster, it will destroy a previous ruling made by the Supreme Court regarding the use of video recorders in the 1980s.