CNET notes that record companies were handed a stunning defeat in court today.

A federal judge in Los Angeles has handed a stunning court victory to file-swapping services Streamcast Networks and Grokster, dismissing much of the record industry and movie studios' lawsuit against the two companies.

While the entertainment industry is certain to appeal, the ruling seems to make perfect legal sense. Companies should not be held liable for the misuse of their product. The product is just like a car, a gun, or a VCR. Just because it can be used for legal or illegal activities by the end user, doesn't mean the product maker is liable.

If the ruling stands, that would mean that the RIAA and MPAA will be stuck trying to sue individual pirates, rather than going after legitimate software makers for the misdeeds of a few.