Michael Page beat the RIAA because he was able to spoonfeed the judge the distinction between centralized and decentralized P2P service:

Late last month, however, U.S. District Judge Stephen V. Wilson in Los Angeles ruled that Grokster and Streamcast Networks Inc., which distributes Morpheus file-sharing software, didn't violate the studios' or labels' copyrights. Although Wilson found that songs and movies were being copied illegally on those networks, he said the two companies weren't liable because they didn't monitor or control users' behavior.

The ruling, which the entertainment companies plan to appeal, blew a gaping hole in the industry's anti-piracy strategy and legitimized a legion of file-sharing upstarts. By helping firms such as Grokster grow stronger, the decision also may increase the pressure on entertainment companies to work with file-sharing networks.

....Page helped frame the case as a battle not over piracy, but over technology. For Page and his allies, it became a fight to preserve a key principle of the law: that products with legitimate uses shouldn't be outlawed just because they can aid lawbreakers.

That principle was established in a landmark 1984 Supreme Court decision that held that the Sony Betamax videocassette recorder didn't violate the Hollywood studios' copyrights: A technology with substantial, legitimate uses couldn't be banned because of the way some people chose to use it.

The parallels between that case and Grokster were so strong, Page said, he was sure he would win.

"The thought that we might possibly lose did cross our mind," Page said with his characteristic deadpan humor during an interview at his cramped office in a converted warehouse on the northeastern end of San Francisco's financial district. "We didn't think it was likely."

....The key is to find analogies that help extend a well-established principle to new technologies.

When the entertainment industry sued Grokster, the major studios and music labels likened the service to a swap meet that knowingly dealt in pirated goods, which is illegal.

Page responded by comparing file-sharing programs with VCRs and photocopiers, legitimate products occasionally used for illegitimate purposes.

....The point was to show that Grokster's software, like the other companies' products, was no different from VCRs. Page argued that these companies don't control whether the products will be employed for legal purposes or illegal ones - users do.

....Page told the judge there was a key distinction between the two: Napster could take that knowledge and do something to stop additional infringements, but Grokster's technology offered no such ability to monitor and control. In that sense, he said, it was just like Xerox supplying photocopiers and toners to a shop that later made copies of textbooks for students.

....As Grokster and other cases help clarify copyright law for the 21st century, they influence where investors place their bets and how entertainment companies respond to the Internet.

"You don't often see an exciting new technology essentially have no venture or public investment," Page said. "I think that will change. And on the flip side, people will be more driven to implement viable legal alternatives [to online piracy] quicker." [LA Times]