The justices unanimously said that Internet file-sharing services can be held responsible if they intend for their customers to use the software primarily to swap songs and movies illegally.
They rejected the arguments that the lawsuits will stymie new technology such as the next generation iPod, and that the companies cannot control what millions of online users are doing with their free software.
As much as 90 percent of songs and movies copied on the file-sharing networks are downloaded illegally, according to music industry filings, reported the Associated Press.
The decision sends the case back to lower court, which had ruled in favor of file-sharing services Grokster Ltd. and StreamCast Networks Inc., saying the companies couldn’t be sued.
But the justices said there was enough evidence of unlawful intent for the case to go to trial.
“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,” Justice David Souter wrote for the court, according to the AP.
The high court on Monday also ruled 6-3 that cable high-speed Internet lines must be opened to rival online service providers.
The decision overturns a U.S. appeals court ruling that cable high-speed Internet service, known as broadband, has a telecommunications component and is subject to traditional telephone network access requirements.
The Federal Communications Commission said in 2002, however, that cable broadband was an information service and therefore free from most traditional telephone service rules, such as requirements to lease network access to rivals.
Telephone companies, which also offer Internet services, have long complained that the FCC requirement to lease some of their high-speed Internet lines to rivals puts them at a competitive disadvantage to cable companies, Reuters reported. Cable companies have invested billions of dollars to upgrade their networks and are aggressively marketing those services.