An Australian court has ruled that the peer-to-peer file sharing network Kazaa authorized copyright infringement by knowingly permitting infringing material to traverse its system, and, furthermore, encouraged such infringement because it was in Sharman’s financial interest. The suit was brought by Australian record companies and units of international record companies such as Universal Music, Sony, and EMI. Kazaa is currently controlled by Sharman Networks Ltd. of Sydney, Australia.
In his detailed case summary, Judge Wilcox threw out conspiracy charges against Sharman, finding that Kazaa’s "Join the Revolution" campaign did not expressly advocate illegal sharing of copyrighted files, and criticized recording companies for opposing file sharing. However, as part of injunctive relief to the record companies, the judge ordered Kazaa must implement mechanisms for protecting copyrighted content on its network from illegal use through either keyword filtering or "gold file flood filtering," although he indicated willingness to reconsider the methodology of copyright protection methods if asked to do so by any party.
The Australian case echoes recent findings of the U.S. Supreme Court in regard to peer-to-peer services Grokster and StreamCast, which the court found could be liable for copyright infringement not because their networks could be used to infringe copyright, but because the services induced users to violate copyright by expressly promoting copyrighted works could be downloaded without permission. (Sharman and Kazaa were also named in that case, although Sharman’s portion did not go before the U.S. Supreme Court.)
The impact of the Australian decision is not yet clear. Sharman has indicated it plans to appeal. Kazaa usage once accounted for a significant portion of overall Internet traffic, but it has since been eclipsed by competitors BitTorrent and eDonkey, in part due to the overhanging litigation from the recording industry but also because of purported adware and spyware included wit the Kazaa client.
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