The entertainment and technology industries' most-important legal dispute in two decades hinges on a question Hollywood confronts every day: What makes a bad actor?

The Supreme Court will ponder that question today when it hears arguments from studios and record labels eager to hold the distributors of two file-sharing programs — Morpheus and Grokster — liable for the wide-scale piracy committed by their users.

Seven major studios, four major record companies and 25,000 music publishers claim that StreamCast Networks Inc., which makes Morpheus, and Grokster Ltd. are "bad actors" in the high-tech world that built businesses around people making illegal copies of movies and music.

"Grokster and StreamCast cannot escape the reality that copyright infringement is their business," lawyers for the movie and music companies contended in court papers, adding that a company should be liable whenever the "principal or primary use" of its product is piracy.

The case has triggered a fierce response from the high-tech and consumer-electronics industries, which argue that the entertainment conglomerates are trying to blur the line between good technology and bad behavior. They want the Supreme Court to reaffirm its landmark 1984 ruling in the Sony Betamax case, which protected companies whose products were capable of substantial legitimate uses as well as illegitimate ones.

"Software doesn't steal content, people steal content," said high-tech entrepreneur Mark Cuban, echoing a line that gun-makers often use when sued for crimes committed by their customers.

How the court rules could shape the digital evolution of entertainment and technology, industries that have long been uneasy partners. A win for StreamCast and Grokster could force the studios and labels to work with their file-sharing nemeses or redouble their attacks on individual downloaders, more than 9,000 of whom have already been sued. A win for the entertainment companies could make entrepreneurs and investors balk at developing new entertainment and communications technologies.

The case has driven a wedge between two groups — large-scale copyright holders and technological innovators — whose works and ideas receive special protection under federal law. Both sides contend that they have as much or more at stake as they did when the court took up two studios' lawsuit against Sony Corp. over the Betamax home video recorder.

The Betamax was the first device that television viewers could use to record broadcasts or play pre-recorded programs. Ultimately embraced by Hollywood, such videocassette recorders spawned the multibillion-dollar home-video industry.

File-sharing programs such as Grokster and Morpheus provide a powerful, inexpensive way to distribute digital goods and data around the globe by letting users copy items stored on one another's computers. One consequence: Millions of people download billions of movies, songs and other digital works free each month without permission from the copyright owners.

The effect of that downloading on the entertainment industry has been hotly disputed. Nevertheless, many record-label executives say downloading is at least partially to blame for the steep drop in compact-disc sales since 2000.

The major labels and studios used lawsuits to kill early file-sharing networks such as Napster and Scour, spawning a second generation of networks that had no central monitoring or control. A federal judge in Los Angeles and the U.S. 9th Circuit Court of Appeals ruled that these decentralized technologies were legal, despite evidence that most of the music and movie downloads were unauthorized.

The rulings forced the labels and studios to start suing the tens of millions of people using file-sharing networks.

"If these services are not shut down," said attorney Michael Graif of Chadbourne & Parke, an expert in intellectual-property law, "then copyright infringement and unfettered copying of music and movies is essentially being condoned."

Many tech firms, meanwhile, worry about the rules for an era when all text, audio and video is digital and nearly every device or software program is designed to connect to the Internet at high speed. They do not want the threat of liability to let Hollywood dictate how products are designed.

As lawyers for the Consumer Electronics Association noted in a court filing: "All digital technologies operate by making copies of millions upon millions of bits."

If the court removes the protections provided by the Sony Betamax ruling, computers, digital cameras, video recorders and even the Internet "would be subject to claims that it 'promotes,' 'contributes to,' 'benefits from' or even 'induces' infringement," they wrote. "Technology developers would face massive liability should any such claim succeed."

Some consumer advocates, copyright experts and artists contend that the major entertainment companies are trying to use copyrights to choke off independent sources of music and video. Fare from the major labels and studios has a stranglehold on radio, television and multiplex cinemas, but file-sharing networks give people an extremely inexpensive way to expose their creative works to the public.

The fight over these issues heated up in Washington last summer, when the entertainment companies persuaded Senate leaders to introduce a bill to hold companies liable if they intentionally helped or prompted people to commit piracy. But the Inducing Infringement of Copyrights Act stalled when lobbyists for the entertainment industry, technology firms, consumer-electronics manufacturers and consumer groups could not agree on a way to target "bad actors" without chilling innovation.

Now, the studios and labels hope to persuade the Supreme Court to give them what lawmakers hesitated to: a clear way to stop those who promote or profit from piracy.