March 4, 2004 3:58 PM PST

Sharman may appeal court ruling

Sharman Networks is considering appealing a decision by an Australian federal court to admit evidence obtained under a search order in the music industry's case against it over file-sharing software Kazaa.

In a statement Thursday issued after the court proceedings, lawyers for Sharman Networks claimed the court decision--in which Justice Murray Wilcox ruled that the civil search orders obtained by the music industry's local subsidiaries should not be set aside--did not represent a "clear win for either side."

Sharman is being represented in the case by a team from Phillips Fox, headed by QC Francis Douglas.

The lawyers said the material seized would remain in the hands of independent lawyers and access to that material negotiated between the parties.

"It effectively means that material seized will not be handed over to the record industry plaintiffs, rather, both parties will discuss a regime of access," they stated.

"In reality, this is a way of converting the 'shock and awe' tactics employed by the plaintiffs by using the Anton Piller order into a more formal, appropriate legal process akin to discovery," they added.

However, the lawyers said they were concerned about the precedent set by the decision. They described the Anton Piller order, a civil equivalent of a search warrant, as "draconian."

"It opens the door for any person or business in Australia involved in the development of new technology to have their homes and offices raided by large multinationals, and property taken, without due process," they said.

Nikki Hemming, chief executive officer of Sharman Networks, said the company had complied with legal proceedings up until the Anton Piller order and had full intentions of complying in the future.

"We remain outraged at the heavy-handed tactics that have been used by the record industry to obtain information that we would have provided through the normal, appropriate court process," Hemming said. "In his ruling, Justice Wilcox acknowledged that Sharman has complied with legal proceedings in the past and that the company would conduct itself in the same manner in Australia."

She said the multinational record companies were just "forum shopping" for an appropriate jurisdiction as they "continue to lose their cases overseas," adding that the record companies should be taking advantage of the new opportunities provided by software such as Kazaa.

"It's time for the record labels to take their business back from their lawyers and capitalize on this new opportunity," Hemming said.

However, the general manager of the music industry's piracy investigations unit, Michael Speck, said "the industry is committed to the growth of legal online music providers and stopping Kazaa's illegal activities is a necessary step in that process."

The case is scheduled to continue in court on March 23.

Abby Dinham of ZDNet Australia reported from Sydney.

 

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