November 29, 2004 5:51 AM PST

Music industry lashes out at Kazaa trial

Kazaa is an "engine of copyright piracy to a degree of magnitude never before seen," an attorney for the music industry said during Monday's start of the Australian trial against peer-to-peer software distributor Sharman Networks.

Attorney Tony Bannon told a federal court hearing, presided over by Justice Murray Wilcox, in Sydney that 100 million people use Kazaa software to share about 3 billion unauthorized sound recordings per month.

Major record labels Universal Music Australia, EMI, Sony/BMG, Warner, Festival Mushroom and 25 additional applicants are suing Sharman Networks and associated parties--including Brilliant Digital Entertainment, Altnet, Sharman CEO Nikki Hemming and others--over alleged music copyright infringement made through the Kazaa software.

Sharman Networks has, during the pretrial phase of the action, said it has no control over what the Kazaa users do with the files and that it is not responsible for the uploading of the songs.

However, Bannon said Sharman Networks is fully aware of how the software is used and is doing nothing to inhibit the infringement.

Sharman Networks make profit "by selling advertising space on the computer screens of the users while they are in the very act of infringing copyright. It was their software which they adapted or designed for their purposes and which they keep updating and finessing--updates which do not make infringements harder but easier. They are perfectly capable of taking steps to inhibit infringing activity," Bannon said.

Bannon also lashed out at the latest version of the Kazaa software, released last week, which Sharman said lets people make free online calls to anywhere in the world. Kazaa v3.0 includes the integration of Skype, which allows long-distance phone calls using P2P technology.

Bannon said the Kazaa v3.0 is "the robbers' reward" and that it does nothing to inhibit copyright infringers.

"Kazaa version 3 provides delightfully contemporaneous evidence that the respondents give their blessing to the copyright-infringing ways of their users. Indeed, they reward them with a new and better product to continue their robbing ways," Bannon said.

Universal Music Australia also raised the issue of the "true ownership" of Sharman Networks. Bannon said there is "ready inference that Kevin Bermeister (Altnet's chief executive) is in fact the ultimate controller of Sharman."

He added that Hemming is "misleading" the public when she claims to fill the position of chief executive.

"Hemming told the press that there were private individual investors behind Sharman. In answers to interrogators ordered by this court, she said that in truth, there were no investors and that she was only trying to make the company appear to be substantial. It follows that she made a false public statement that there were investors behind the company. In short, she is not the CEO, and the apparent shareholders are not the real controllers," Bannon said.

Bannon said Brilliant Digital Entertainment--the parent company of Altnet--and Consumer Empowerment BV--which later changed its name to Kazaa BV--entered into a technology bundle license agreement in 2001. Kazaa BV and Sharman Networks then entered into a license agreement in 2002, which stated that Kazaa BV had agreed to sell its business to Sharman Networks.

Sharman Networks' attorney is scheduled to offer its opening statement on Tuesday. The trial is expected to last three weeks.

Kristyn Maslog-Levis of ZDNet Australia reported from Sydney.

7 comments

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The real truth behind all this...
This is NOT about people stealing copyrighted material. What this is, is purely a means for the recording industry to gain a tighter grip of control over what the population of the planet can and cannot do. This is about control. Nothing is being stolen at all. All performers get due credit...by the very nature how how P2P software works. We are all "users" of computers, and as "users", we use. NO ONE is claiming that the Metalica song they downloaded was performed by anyone other than Metalica.

If anyone should receive ridicule, it is the recording industry for their immorality, ignorance, and desire for TOTAL world domination.

This Whole thing is absurd. If the recording industry wins this fight, it very easily could have rippling effects on the internet that could end up destroying it.
Posted by Prndll (382 comments )
Reply Link Flag
More BS
They always say filesharing companies can inhibit copyright infringment, but they don't say how. In the rare case when they do suggest a solution it's one that has little chance of working because it would quickly get hacked.
Posted by unknown unknown (1951 comments )
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Strange logic
What is the difference in downloading a song and
recording it off the radio or a CD and sharing it
with friends? This only helps to promote an artist
and increases sales of "very expensive" CD's that are
always of better quality than the downloaded file.
It seems the RIAA is missing the boat on this one
and is shooting itself in the foot. Artists will
go the independent route and cut out the middle man.
Posted by Johnny Mnemonic (374 comments )
Reply Link Flag
RIAA is missing the boat
<a class="jive-link-external" href="http://www.analogstereo.com/volvo_960_owners_manual.htm" target="_newWindow">http://www.analogstereo.com/volvo_960_owners_manual.htm</a>
Posted by George Cole (314 comments )
Link Flag
Civil liberties issue
This is a clear issue of civil liberties. Outlawing a device or software because it might be used for unlawful actions is a decision that must be taken after careful consideration. After all almost any tool or device could potentially be used for unlawful activity (e.g. email) and such a prohibition would be a significant curtailment of freedoms. It better be worth it. Given that the US has decided that even guns, perhaps the device that has the fewest alternative uses other than injuring people, should not be outlawed, it hardly makes sense to outlaw P-2-P software which is quite unlikely to ever take anyone's life.
Posted by (9 comments )
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exactly
yeah, according to this lawyer's logic, every computer hardware manufacturer, every CD device and media maker, and every operating system maker and media software maker, should be sued as well. After all, all their stuff can easily be used to unlawfully infringe on their copyrights too. And they know very well how it could be prevented, and I say they could do something to stop it. Yet they continue to not stop it... in fact, of all the horrors, they keep coming out with newer easier-to-infringe-with versions, so apparently "give their blessing to the copyright-infringing ways of their users. Indeed, they reward them with a new and better product to continue their robbing ways".... blah blah

The only reason they're not suing all them is because they'd have no product at all without them. The recording industry needs devices to play their songs on! So they go pick on the little guy instead, the one they think they might be able to get away with it.

This kind of overreaching really pisses me off at the redording industry... isn't there some legal way we as users can fight back? boycott or something maybe?
Posted by dburry (37 comments )
Link Flag
P2P Can Only Help
Personally, I think that it is stupid for the Music Industry to go after Kazaa. Yeah, they will probably win... but that does not make the action necessary.

The copyright infringement stuff is not yet legal... I can understand that... but haven't these guys figured out yet that P2P is actually helpful, not hurtful.

It is like free promotion! Free advertising! Because of P2P, I guarantee the Music Industry sells more CDs and more concert tickets than they otherwise would.

<a class="jive-link-external" href="http://allwaysmusic.modblog.com/" target="_newWindow">http://allwaysmusic.modblog.com/</a>
Posted by (59 comments )
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