If Microsoft is able to police conversations carried over Live Messenger, shouldn't it be unable to invoke the dumb pipe defense and be held responsible for any piracy its service allows to happen because its negligence in blocking the evil activity happening on its own network. They even profit from those activities! And not only copyright infringement - bank robberies, terrorist attacks, child molestation, heresy - it's all their fault for not blocking it in the first place.

I would love to see this idea in court.

OTOH, who can be sure they do not store IP and login (or other personal information associated with the Live profile) and hand it to anyone with the proper court order?