In a win for the music business, a judge in Australia has ruled that the operators of the Kazaa file-sharing network authorized the widespread violation of copyright works. He ordered that significant changes be made to how the Kazaa service works.
Federal Justice Murray Wilcox, of the Federal Court of Australia in Sydney, stopped short of ordering that the peer-to-peer file-sharing service be shut down. But he said that changes must be made in order to prevent, to the extent possible, any further copyright violations.
The decision is a blow to Kazaa operator Sharman Networks, which has been battling the closely watched case since early last year. In a brief statement Monday, the company said it was disappointed with the decision and vowed to appeal it vigorously. The company will not comment further until it has studied the decision in detail, a spokeswoman said.
The case against Sharman Networks was filed by the local subsidiaries of most of the big recording labels, including Universal Music Group, Sony BMG Music Entertainment, and EMI Group.
Sharman Networks, along with five affiliates named in the case, was ordered to pay 90 percent of the labels' legal costs. A further hearing will take place to determine monetary damages, Justice Wilcox ordered.
The plaintiffs did not get all they had asked for. Justice Wilcox denied claims that Sharman Networks violated Australian trade practices and conspiracy claims, and he ruled that the company's directors were not themselves guilty of copyright infringement. "The more realistic claim is that the respondents authorised users to infringe the applicants’ copyright in their sound recordings," he wrote.
The Kazaa network can continue to operate if it meets one of two conditions, Justice Wilcox wrote. One option is to include a "non-optional" key-word filter that excludes from the service all works identified in a list provided by the copyright holders. The filter must be available to all new users of Kazaa and in all future versions. Sharman Networks must apply "maximum pressure" on existing users to upgrade to the new version.
The second option is that Kazaa's TopSearch feature be modified so that it only returns results for works that have been licensed for use on Kazaa.
Explaining his decision, Justice Wilcox said that warnings on the Kazaa Web site that its users must not share copyright works, and the fact that users agree not to do so when they sign the end user license agreement, were insufficient.
"[I]t has long been obvious that those measures are ineffective to prevent, or even substantially to curtail, copyright infringements by users," Justice Wilcox wrote. "The respondents have long known that the Kazaa system is widely used for the sharing of copyright files."
Sharman Networks could have used keyword filtering or file filtering to reduce illegal file sharing, according to the judge. It chose not to, he said, in part because it makes more advertising revenue if it lets users share a larger number of files. Instead, on its Web site Sharman Networks criticized music companies and urged people to "Join the Revolution," the judge wrote.
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