Sharman pleads innocence as trial winds down

Peer-to-peer software provider Sharman Networks and its related parties, which stand accused of copyright infringement by the Australian recording industry, collectively denied the charges against them during closing statements Wednesday.

The record labels say that users of Sharman's software, Kazaa, download billions of files each month without paying royalties to copyright owners. Previously during the trial, an attorney for the music industry called Kazaa an "engine of copyright piracy to a degree of magnitude never before seen." The trial, which has taken place in Sydney, began in November. It was expected to end late Wednesday.

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As part of their case, the music labels have pointed to the existence of an alleged central server, which supposedly allows the peer-to-peer company to monitor the sharing of copyright-infringing music files through the Kazaa system.

But during proceedings Wednesday, Sharman attorney Tony Meagher said there was no clear evidence to prove any guilt.

"If there was such a server," Meagher said, "it would be one of the largest concentrations of computing power on the planet, and it is inconceivable that the applicants and their expert advisers could have failed to detect its existence and whereabouts, and adduce direct evidence about it.

"The evidence clearly demonstrates that the Sharman respondents do not receive or collect, and do not have the capability to receive or collect, any information on individual users or their downloading and file-sharing activities. They have no commercial need to do so, and there is no requirement for them to do so."

Additionally, in a court document, Sharman said the machine that runs the Kazaa Media Desktop program, or KMD, only sends three types of information to its Web servers, which are operated by Akamai. The data includes a user's KMD version number, preferred language settings and Internet Protocol address.

"The evidence does not identify any other information being received by Akamai or the Sharman respondents in relation to users," Sharman said in the document. "None of that information is relevant to an act of copyright infringement or even the use of the KMD. No information relating to use is available via the Kazaa Web site because neither the searching nor the downloading functions of the KMD make any use of the Kazaa Web site or any other Web site."

Down on filters
Meagher said that the music industry's recommendation of putting filters on Kazaa to inhibit the exchange of copyright-infringing music files is impossible.

One expert witness for Sharman previously testified that the "technical and economic difficulties in implementation, operation and potential for circumvention makes it impossible to implement filtering functionality effectively."

Some of the challenges include differentiating between legal and illegal music files, and obtaining a list of licensed work from a person's computer--which is a tedious and bandwidth-hungry process.

"There is no evidence of the existence of a non-optional filter--whether within the KMD or otherwise--where a third party determines the content to be filtered and imposes that on users," Sharman asserted.

According to Meagher, filters residing on a PC can be easily removed by the users themselves. They can also block the communication updates of filter terms to their machines.

Sharman also addressed allegations that it has control over file types downloaded by users: "The software is content-neutral and the Sharman respondents do not and cannot control either the files (whether video, music, text or otherwise) which users might make available by placing them in their My Shared Folder or the content which they search for and choose to download using the software."

"Neither Sharman nor any other respondent has knowledge of precisely what users are searching for, uploading or downloading at any time," the company added.

Another party being sued is online digital entertainment distributor Altnet. Its attorney, Steven Finch, emphasized during his closing statement that the company's TopSearch technology only deals with searches for "gold files" (licensed music) and has nothing to do with "blue files" (unlicensed music).

"Altnet technology provides a list of matching gold icons to KMD," Finch said. "At no point do we have anything to do with the copying of blue files."

Justice Murray Wilcox, the presiding judge, is expected to release his judgment in four to six weeks.

On Tuesday, Sharman CEO Nikki Hemming, Altnet CEO Kevin Bermeister, and his wife, Beverly, agreed to freeze their personal assets until seven days after judgment is reached.

Kristyn Maslog-Levis of ZDNet Australia reported from Sydney.