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A US Supreme Court has ruled file sharing networks are liable for copyright infringement performed by those using their services.

Monday’s court decision in the MGM vs. Grokster case states file sharing software encourages users to illegally distribute copyrighted material on the internet.

“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,” said Justice David Souter.

As a result, services such as Grokster and Limewire can be sued for copyright infringement.

In earlier cases, programs such as Grokster were compared to VCRs, something that provides a medium of exchange.

The entertainment industry sees this announcement as a major win in its fight against illegal music and movie downloaders.

However, the ruling comes as a blow to groups who support peer-to-peer file sharing.

Meanwhile, the Canadian Parliament is working on its own law to address digital copyright issues – Bill C-60. If passed, the law calls for users, not service providers, to be liable for copyright infringement.

Look for more news on Bill C-60 after the Parliament’s summer recess in the fall.

Microsoft’s UK division is developing its own form of peer-to-peer file sharing software similar to BitTorrent, but considerably faster.

The software giant hopes its new program, codenamed Avalanche, will be used to legitimately distribute licensed media and software.

Unlike BitTorrent, where users must wait for “chunks” of a file to be downloaded from peers who share the identical data, Avalanche can rebuild missing parts of a file using a technology called “network encoding.”

Once specific parts of a file have been downloaded to a user’s computer, Microsoft’s peer-to-peer file sharing program has the ability to generate missing data on its own. According to Microsoft, this will speed up the download process by up to 70 per cent.

As well, Avalanche is designed to automatically share files on a user’s computer, increasing a file’s availability to the public.

Recently, US courts have worked to shut down major websites that contain links to torrents as the entertainment industry seeks to minimize illegal file sharing.

However, proponents argue BitTorrent provides an affordable means of content distribution because large files do not have to be stored on a central server. Instead, all users who download the file share it with others, deferring bandwidth costs from the distributor.

Microsoft says it will include a digital rights management system in Avalanche, allowing the software to share purchased content with other users who buy identical music, movies, or software.

The company has not announced when Avalanche will be available to the public.