The Wall Street Journal is reporting that veteran P2P player (and loser of the recent Supreme Court battle with MGM) Grokster is in talks to be acquired by Mashboxx, the "legitimate" P2P network currently in private beta. Grokster, it seems, is hoping to go legitimate itself, and the terms of the deal would require Grokster to settle its current legal disputes with the recording industry. It's not clear whether an acquisition would lead to changes in Grokster's (or Mashboxx's) software but, says WSJ, "Mashboxx would likely share a portion of any future revenue Grokster generates with Grokster's current owners."

Following KaZaA's Australian court defeat last week, the ruling judge laid out two conditions for an appeal: one, that Sharman Networks must ready their case to be heard by the Full Court, which sits from February 13 to March 10 of next year, and two, they must modify their software as ordered. Sharman is expected to meet the requirements and file for an appeal by the three-week deadline. Music industy consultant Michael Speck had this bit of snark to add: "We would be surprised that Kazaa would want to appeal against the opportunity to become a legitimate business."

I can't believe it's been a year since the first capitalization-challenged post at our sister blog Hack A Day. They're counting the milestones, blowing out candles, and picking their favorites over there, so head on over and wish them a happy Hack A Birthday.

Yesterday a judge in Australia ruled that the file-sharing program KaZaA violates copyrights because it allows users to swap copyrighted files. The judge ordered that Sharman Networks modify KaZaA to make it filter out copyrighted works, put "maximum pressure" on users to "upgrade" to the new crippled filtered version, and pay 90% of the music industry's court costs. The industry, of course, is tooting their own horns about the ruling, and Sharman, of course, are vowing to appeal. CNET has more.

Do you love to blog? Do you love P2P? Did you follow the Grokster case with great trepidation? Do you have a high BitTorrent upload ratio and passable grammar? You could be the next blogger for Weblogs, Inc.'s Peer-to-Peer Weblog.

We're currently looking for another blogger to help fill this page with excellent daily P2P news. If you think you're up to it, here's what you do: Write three sample posts like the ones you enjoy here, but in your own voice. P2P news, how-to articles, whatever. Just be creative. Then submit them via our I Want to Blog form. Feel free to tell us a little bit about yourself, too, and why you think you'd be good for the job, but it's the sample posts that are most important (yes, it is a paying gig).

We hope to hear from you soon!

The Dutch music industry has demonstrated how not to build a case against alleged file-swappers. They lost their case because Media Sentry, the company they hired to snoop on P2P users, was only able to prove that the defendants had copyrighted files in their shared folders, not that those files were ever uploaded to other users (which is the illegal part). Oops!

Update: Commenter Abbie pointed us to P2Pnet's story on the case, which makes The Register's (and my) reporting look pretty sloppy. P2Pnet's version says that the Dutch music industry's case was doomed by its reliance on an overseas third party (Media Sentry is based in the U.S.) which didn't sign a Safe Harbor agreement to conform to European privacy protection laws.

The RIAA has spent millions suing college kids and spreading FUD about P2P, but have been completely outdone by another sector, one which wishes people would download still more P2P apps: Spyware. MP3newswire.net is reporting on a Pew study that says 25% of those polled stopped using file sharing software because of spyware.

Opera has announced that the next version of their browser, Opera 8.02, will come with built-in BitTorrent support. A "Technical Preview" can be downloaded from Opera's beta testing forums. Considering the increasing ubiquity of BitTorrent for distributing large and popular files, this is an incredibly savvy move and I hope that other browser makers (or extension authors) will follow suit.

About 10% of Swedes use the internet to download copyrighted files, and as of today each one is a criminal. Previously, offering copyrighted files for download was illegal in Sweden, but for the first time downloading them is as well. Everybody quoted in the AP article is pretty sure that this new law will really amount to nothing unless someone is actually jailed under the new law, because prosecutors won't go after cases if a fine is all that's likely to result.

Announcing Download Squad, the latest blog from Weblogs, Inc., and what Jason Calacanis is calling the "Engadget of software." Download Squad brings you the latest software news and some of the coolest downloads, web apps, and desktop toys out there. Take a look!

P.S. We're still looking for a few bloggers to round out the Squad, so take a look at Jason's post if you think you're up to it.

Today the Supreme Court handed down a unanimous ruling in MGM vs. Grokster, saying that P2P companies can be held liable for their users' copyright infringement. In his opinion Justice David H. Souter wrote, "We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties." The decision paves the way for a torrent of lawsuits against P2P companies, but plaintiffs must be able to prove that a company intends for their technology or service to be used for infrigment. As pointed out by Jennifer at The Shout, a company selling a file-sharing technology with "bad" intentions could be held liable but another company selling an identical technology with "good" intentions could not. In the end, this is not a case about what your technology is or is not capable of, it's about what you intended it to be used for. How that distinction will play out in the lower courts remains to be seen.

If you're into that sort of thing, SCOTUSblog provides PDF links to the opinions by Justices Souter, Ginsburg, and Breyer. Much comment is sure to follow.

With the release of Morpheus 5.0 Beta and the supreme court decision in MGM vs. Grokster now expected on Monday, ZeroPaid got an interview with Streamcast CEO Michael Weiss for a second time yesterday (the podcast interview from earlier this week can be found here). This time they talk about Morpheus 5, Streamcast's NEONet P2P network, sponsored results on Gnutella and, of course, the Supreme Court.

For those anxiously awaiting the court's ruling, SCOTUSblog will be a good place to keep an eye on come Monday morning, and if you're interested in the Supreme Court's other rulings this week (i.e. ones not related to your digital rights), SCOTUSblog's analyses are worth reading.

P.S. Apparently after my complaining on Tuesday about ZeroPaid's obnoxious green "sponsored links," ZeroPaid's Chris Hedgecock caused them to be banished. How great is that?

Brad Hill over at the Digital Music Blog has written a thoughtful article about the impending debuts of Mashboxx and Peer Impact, the first two P2P services authorized by the recording industry. Actually, it's mostly about Peer Impact, but as always, Brad's analysis is worth reading. You can find it over here.

A beta version of Streamcast's Morpheus 5.0 is out today. The new version features an all-new interface, improved BitTorrent support, Creative Commons search, web proxy support, better searches and faster downloads. The beta is claimed to include no spyware or bundled software, but is still ad-supported. You can download it directly from the Morpheus web site.

I'm really not sure what to make of this. Like the rest of us, John C. Dvorak saw the news of Microsoft's "Avalanche" paper as well as the Spyware story. Uniquely, however, he built a conspiracy theory out of it. He says that these two bits of news breaking almost simultaneously was orchestrated by Microsoft in an effort to discredit BitTorrent, because they were "asleep at the wheel" again and missed the swarm-boat. I'm not saying he's wrong; I'm not even saying his theory is beyond the realm of imagination. But he's still got me confused. He wraps up the article complaining about the media, blogs included, lapping up these stories without question, rather than telling us what Microsoft's motives could be, apart from spite. BitTorrent is remarkable, sure, and any greedy company, especially Microsoft, would like to have it under their thumb, and maybe they're completely chafed about it. But if yesterday's news was Microsoft's way of "playing dirty to discredit the thing," then I have to say I'm pretty disappointed.