As part of a settlement with the RIAA following a loss in the U.S. Supreme Court, peer-to-peer file sharing service Grokster has stopped distributing its software.

Following a defeat in the U.S. Supreme Court in June 2005, peer-to-peer file sharing service Grokster today pulled its software from distribution as part of a settlement with the Recording Industry Association of America (RIAA) and shut down its file-sharing service. Details of the settlement will reportedly be available from a federal judge in Los Angeles at the end of the day.

Grokster’s Web site now reads in part: “The United States Supreme Court unanimously confirmed that using this service to trade copyrighted material is illegal. Copying copyrighted motion picture and music files using unauthorized peer-to-peer services is illegal and is prosecuted by copyright owners.”

The Supreme Court found that Grokster (and P2P company Morpheus) were potentially liable for copyright infringement because they actively promoted their software as being capable of downloading copyrighted works without permission.

Grokster’s site now reads: “There are legal services for downloading music and movies. This service is not one of them.”

The U.S. Supreme Court decision does not bar peer-to-peer file sharing technology for non-infringing purposes, however, and Grokster apparently hopes to resurrect itself as Grokster 3G, a new desktop P2P client with no adware, bundles, or spyware.

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