The ongoing feud between the music industry and developers of peer-to-peer (P2P) software returned to court again yesterday.

The Recording Industry Association of America (RIAA), backed by the National Music Publishers' Association and more than 20 film studios, is hoping that a California appeals court will overturn a ruling that P2P sites can have legitimate uses.

Lining up against the RIAA and its supporters are Grokster and StreamCast Networks (developer of Morpheus), supported by action group the Electronic Frontier Foundation.

The RIAA wants to overturn the April 2003 decision of judge Steven Wilson that file-sharing networks have both legitimate and illegitimate uses.

The ruling meant that P2P operators could not be held liable for the actions of P2P users.

Judge Wilson in his ruling said that Grokster and StreamCast were "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 RIAA claims that failure to reverse the decision could "gravely threaten any possibility for meaningful copyright protection in the digital era".

Meanwhile, P2P operators have warned that if the ruling is changed, companies will no longer be able to develop new and innovative products without first asking permission from copyright owners.

Both sides will have 30 minutes in court to present their arguments. But it is likely to be some months before a ruling is given by the three appeal judges.

In December last year, a similar decision was handed down by the Dutch Supreme Court after action was brought against Sharman Networks by the RIAA's European counterpart, the International Federation of the Phonographic Industry.

That court also ruled that Sharman Networks, developer of the Kazaa software, could not be held responsible for copyright infringement.