A US court has upheld the legitimacy of peer-to-peer (P2P) file-sharing application Morpheus, finding against 28 of the world's largest entertainment companies which had alleged that the P2P firm's software violates copyright law.

Morpheus said the US Court of Appeals' decision deals a crushing blow to the major entertainment companies, which have attacked the firm and other P2P software companies claiming that developers should be responsible for the public's use of the software to infringe copyrights.

The ruling asserts that the distribution of file-sharing software is legal because the product is capable of "substantial non-infringing uses", and because StreamCast, which produces the Morpheus software, cannot control the various uses that end users make of the software.

The court's decision states that: "The introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through well established distribution mechanisms.

"Yet history has shown that time and market forces often provide equilibrium in balancing interests, whether the new technology be a player piano, a copier, a tape recorder, a video recorder, a personal computer, a karaoke machine or an MP3 player."

Michael Weiss, chief executive of StreamCast Networks, stated that StreamCast is no more liable for copyright infringement for Morpheus than Sony was for distributing its Betamax VCR.

"For over a century the entertainment industry has fought new technologies, and they have been wrong every single time," he said.

"We have always known that, like the VCR or the photocopier, there are a wide range of legitimate uses for our software, and the legal precedents, as well as history itself, have always been in our favour.

"In the end it will be the plaintiffs themselves that stand to benefit most from our victory. I hope that with today's decision, the entertainment industry will seize the opportunity to embrace innovative technologies, like Morpheus, and begin to view us as the primary channel for the distribution of digital media to reach the masses."