Oral arguments are set in the US Supreme Court on Tuesday in MGM v. Grokster, a case with potentially huge consequences.

File sharing programs are used for downloading music and movies, but they are also used for group collaboration and completely legitimate distribution of software and media. There are exciting things being developed on peer-to-peer platforms.

The recording and film industries are so frightened that they want to close down the entire concept of peer-to-peer communication. They seek a ruling from the Supreme Court that holds file-sharing software companies legally responsible for copyright infringement on their networks. Make no mistake – that is a shutdown order for every company developing software based on peer-to-peer technology, and potentially shuts down innovation in many more fields.

Mark Cuban is a rich guy and a believer in the future of digital technology and distribution. He’s president of a company providing high-definition television content, as well as owning a movie library, a chain of theatres, a production company, and the Dallas Mavericks. He wrote a fascinating blog entry over the weekend revealing that he is funding part of Grokster’s defense and sees the future of technological innovation hanging in the balance.

“If Grokster loses, technological innovation might not die, but it will have such a significant price tag associated with it, it will be the domain of the big corporations only.

“It wont be a good day when high school entrepreneurs have to get a fairness opinion from a technology oriented law firm to confirm that big music or movie studios wont sue you because they can come up with an angle that makes a judge believe the technology might impact the music business. It will be a sad day when American corporations start to hold their US digital innovations and inventions overseas to protect them from the RIAA, moving important jobs overseas with them.

“Thats what is ahead of us if Grokster loses.”

Here’s an article about Cuban’s participation in the case and the upcoming hearing.

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