Many, including myself, initially thought the unanimous Grokster decision was a disaster for innovation. Some still claim it will significantly chill innovation as nuances of the inducement test are fleshed out in litigation, but it's not the clear disaster that we once thought.

As I mentioned briefly in that latter post, I don't think it dramatically affects the landscape for real innovators. In fact, it just might be the best decision they could have reached. The fact is, the bad actors are going to be punished, whether by a Court-created rule or legislation. If the Supreme Court decision let Grokster and StreamCast off, Congress would have stepped in with what would certainly have been much broader than the active inducement test.

More significantly, the decision decouples the underlying technology from the intentions and actions of the creators. The decision is not an indictment on peer-to-peer software itself. The way I see it, it just means that bad actors can't hide behind the guise of innovation.

Judging from two recent announcements in the peer-to-peer space, it seems those chilling effects might be somewhat exaggerated. 

Opera Browser recently announced native support for BitTorrent files. Kevin suggested that this was a hitlist nominee, but I disagree. In fact, I don't think they would have liability under inducement even if Bram Cohen was found liable. The fact is, because this test considers the behavior of the actors as well as the technology, we can reach different results for two companies distributing identical software. And that's a good thing. Christian Krogh, Opera's VP of engineering, puts it very well in the article: "Viewing it as a download protocol, in the same way as you can view HTTP and FTP, it seems like a normal extension of the capabilities of a browser."

Microsoft has even ventured into the peer-to-peer space, announcing what it claims is a better BitTorrent. Of course, while Microsoft Research is responsible for many of the innovations that come out of Redmond, it doesn't mean Microsoft will release this as a consumer product.

The point is, innovation is still happening, and I would argue that it is not despite the Grokster decision but because of it. As much as we might complain about the ambiguity of the inducement test, it demonstrates a desire to protect the well-meaning innovator.