MGM v. Grokster
A 2005 US case holding that file-sharing companies could be liable for their users' infringement because they had actively encouraged it.
After Napster fell, Grokster and StreamCast, maker of Morpheus, built file sharing with no central server. The companies therefore could not see what users traded, and two lower courts cleared them on the strength of Sony v. Universal: the software had lawful uses. In June 2005 a unanimous Supreme Court reached the opposite result by a different route. Whoever promotes a tool with the stated aim of having it used to infringe is liable for the infringement, whatever else the tool can do.
The evidence came from the companies themselves: internal email and advertising aimed squarely at former Napster users. The Betamax rule was left intact. Grokster closed that November, replacing its download page with a notice that illegal file sharing was not anonymous.