“We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” Thus writes Justice David Souter on behalf of a unanimous Supreme Court in the Grokster case. The ruling is being called “a sweeping victory for music recording companies and movie studios” that sets “the stage for a major legal assault on rampant file-sharing of copyrighted works by attacking the software designers.”

The ruling does seem frighteningly open-ended, with possible implications reaching beyond peer-to-peer software. What constitutes an “affirmative step to foster infringement”? What about, say, Apple’s famous “Rip. Mix. Burn.” ads promoting its computers’ iTunes software and CD burners? What about Google’s practice of scanning books into its database? Faced with the possibility of deep-pocketed media companies launching lawsuits hinging on interpretations of a company’s intentions, many entrepreneurs will no doubt be deterred from pursuing a whole lot of innovations.

Here’s a pdf of the court’s full ruling.

Other takes on the ruling: New York Times, Dan Gillmor, Doc Searls, Cory Doctorow, Tom’s Hardware Guide, Fred von Lohmann, RIAA.