September 5, 2005

Australian court rules against Kazaa

By Michael Perry

SYDNEY (Reuters) - An Australian court ruled on Monday that
users of Kazaa, a popular internet music file-swapping system,
breached music copyright and ordered its owners to modify the
software to protect copyright.

Federal Court Judge Murray Wilcox ruled that Kazaa's
owners, Sharman Networks, had not breached copyright but had
encouraged millions of Kazaa users worldwide to do so.

"The respondents have long known that the Kazaa system is
widely used for the sharing of copyright files," said Wilcox in
his ruling in a Sydney court.

Australia's major record companies sued Kazaa's Australian
owners and developers, Sharman Networks, claiming Kazaa's
breach of copyright had cost them millions of dollars in lost

"The court has ruled the current Kazaa system illegal,"
Michael Speck, a spokesman for the Australian music industry,
told reporters outside the court.

"It is a great day for artists, it is a great day for
anyone who wants to make a living from music," Speck said.

The record companies will now seek damages for hundreds of
millions of pirated music downloads, saying Sharman Networks
had boasted that Kazaa downloaded 270 million tracks a month.

The music companies include the local arms of Sony BMG
Music Entertainment, EMI Group, Warner, Universal Music and
several Australian firms.

Sharman Networks defended the use of the internet to
download music tracks, telling the court that file sharing
reflected a revolution in the way music was distributed and

It said it had copyright protection in place, such as its
licensing agreement, but added it could not control the actions
of an estimated 100 million worldwide users.

Judge Wilcox said Kazaa failed to use available technology,
such as key word filters, to prevent copyright infringements
because it would have been against its financial interest.

He said that Kazaa's "Join the Revolution" Web site
campaign to attract users did not directly advocate sharing
copyright files, but criticised record companies for opposing
file sharing.

"It seems that Kazaa users are predominately young people,
the effect of this web page would be to encourage visitors to
think it 'cool' to defy the record companies by ignoring
constraints," Wilcox said.

Wilcox ordered Sharman Networks modify the Kazaa software
with filters to protect copyright.

"If Kazaa cleans up its act and does what the court has
ordered it to do, stop its illegal business, then they have an
opportunity to be part of the music industry," said music
industry spokesman Speck.

Recorded music sales have slipped in recent years, with
global sales down 7.6 per cent in 2003 to $32 billion,
according to the International Federation of the Phonographic

The federation blames rampant piracy, poor economic
conditions and competition from video games and DVDs for the
slump. Supporters of file swapping argue that it can encourage
people to buy music by exposing them to a range of styles.