I would say I called the Grokster decision. The “substantial non-infringing use” standard did not exist in a vacuum. Rather, it was embedded in a set of considerations concerning the motivations and impact of a company’s business model. In Sony’s case, the Betamax was clearly an innovative new piece of hardware that incidentally enabled copyright infringement. Grokster, in contrast, was a novel way to evade copyright law that incidentally allowed people to share a few legal files. Rather than buying Grokster’s fatuous arguments and mechanistically applying the “substantial non-infringing use” standard where it clearly didn’t make sense, they looked at Grokster’s actual behavior and business model and concluded–correctly in my opinion–that Grokster was obviously a program designed to facilitate copyright infringement.
The interesting question is whether the court has created a new standard, a successor to “substantial non-infringing use”, that will provide the technology industry with a safe harbor for innovation. On a cursory reading, it appears that the opinion is decided narrowly enough–focusing on Grokster’s specific business model and the ample evidence that they fully intended to attract illegal file-traders–that this shouldn’t strike fear into the hearts of future entrepreneurs. As long as a product is designed for a legitimate use, the fact that many of its users engage in piracy shouldn’t put the product under a legal cloud. I could be wrong, though.
(Cross-posted to the Bit Bucket)