Legal arguments were in full force on Monday in the U.S. Federal District Court case in Los Angeles pitting the Streamcast, Morpheus and Grokster file-swapping networks against the Recording Industry Association of America (RIAA), the film studios, and various artists and writers.

The lawyers for the file-sharing services companies Streamcast and Grokster, which distribute Morpheus peer-to-peer software, argued that they can't control what users do with their software. They also argued that their services don't offer a centralized directory of songs and films, and that when people use their file-swapping services the users contact each other, without the company taking any action. They claimed that the "infringement" alleged against their services is comparable to using a photocopy machine to illegally copy sheet music or pages from a book. The lawyers representing the Recording Industry Association of America (RIAA) and film studios countered that the file-sharing services encourage copyright infringement and illegal copying of music and films, and that these services should be shut down immediately and ordered to pay millions of dollars in damages for copyright infringement. Even if the Judge in the case, the Hon. Stephen Wilson, rules that these companies must block trades of files and/or be shut down, this would not be easy to implement. Grokster and Kazaa both use FastTrack, proprietary software that is theoretically capable of operating on its own without any company behind it. Morpheus' software has evolved to Gnutella open-source technology, which creates networks that operate independently of the companies producing Gnutella-based software products.

Judge Wilson listened to all arguments Monday, but took no immediate action. He indicated that he would make a ruling at a later time, saying that before making an actual ruling, he would most likely release a "speaking order" outlining his thoughts on the case. Obviously, the importance of the case has not been lost on Judge Wilson. "That would give me certainty that I hadn't missed something," Wilson told the attorneys. "Some of the things said here were provocative. I'll have to go back and re-think some of my impressions."

Kazaa file-sharing services parent, Sharman Networks, did not participate in the arguments in court on Monday, as the issue of whether jurisdiction exists over Kazaa is a separate issue to be resolved prior to determining whether infringement occurred by Kazaa. The Sharman Networks legal defense team is expected to argue that the U.S. has no legal jurisdiction over Kazaa, since Kazaa is based in a remote location in the South Seas and has not marketed its file-sharing services to U.S. customers (claiming that, therefore, no legal "nexus" for jurisdiction to bring an action in the U.S. exists).