In another blow to P2P (peer-to-peer) filesharing, a US federal judge ruled this week that the Morpheus software program encouraged users to infringe upon copyrighted works.
StreamCast, the owner of Morpheus, "cannot seriously argue that it did not know that the popular music and movies traded on its network were copyrighted", wrote US district judge Stephen V Wilson.
The ruling is another win for record and film companies, which sought an injunction against distribution of the filesharing software in the suit, filed in 2001.
StreamCast continued to fight after two other companies named in the suit, Grokster and Sharman, the company behind the Kazaa filesharing client, reached settlements with the entertainment industry. Streamcast said it could consider appealing, saying the software has legal uses.
"We do not believe that StreamCast encouraged users to infringe on copyrighted works, and the company never intended to do so," it said in a statement.
Filesharing software companies have been battered by a string of successful legal suits by the entertainment industry. In June 2005, the US Supreme Court found that both Grokster and Streamcast could be held liable for copyright infringements by users.
Earlier this month, MetaMachine, which distributed the eDonkey client software, settled a copy infringement case with the record industry for $30m (about £16m).
Just weeks prior, Sharman agreed to pay $100m (£53m) to end outstanding lawsuits with the entertainment industry.
Major record companies and movies studios have used aggressive legal tactics against illegal filesharing, suing both software companies and individual users, in an effort to halt falling revenues attributed to piracy.