Sony owned the Betamax corp, which manufactured and sold the first VCRs. Universal sued Sony, alleging that because they (Sony/Betamax) were manufacturing a device that could potentially be used for copyright infringement, they were thus liable for any infringement that did occur.
The court ruled 5-4 in favor of Sony (Stevens, Burger, Brennan, O'Connor, and White in agreement. Marshall, Powell, Rehnquist, and Blackmun dissenting)
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Many of the same points of law that were litigated in this case are still being argued in various cases, particularly in light of recent peer-to-peer lawsuits. The DMCA modified the law this decision was based upon in several ways, and new interpretations are constantly being handed down. Facts
Supreme Court holding
Reasons
Majority opinion
Dissenting opinion
Subsequent history