A US Court of Appeals is meeting today to review the decision of a federal judge who ruled that distributing file-swapping tools such as Grokster and Morpheus was legal.

The ruling indicated that the parent company – Streamcast Networks – bore no legal liability for copyright infringement occurring on those networks.

Now defending its win, Streamcast Networks Chief Executive Officer Michael Weiss told Cnet: "This is not about piracy, but about who can control technological innovation. The entertainment industry has a bad record in determining what technology will rise to the forefront."

Last April federal Judge Stephen Wilson ruled that: "Grokster and Streamcast are not significantly different from companies that sell home video recorders or copy machines, both of which can be and are used to infringe copyrights."

But the recording industry and Hollywood studios are arguing that Wilson was wrong, and the VCR argument does not apply if a company knows that its products are being used illegally.

Motion Picture Association of America attorney David Kendall said: "We believe (Grokster and Streamcast) are operating just like Napster and fall under the Napster ruling that the court handed down three years ago. They do have one thing Napster lacked, and that is a good business model. They are making millions of dollars off of content that is not theirs."