Kazaa appeal likely in 2006

In a landmark anti-piracy judgement, the Federal Court found Sharman Networks, and associated individuals and companies had facilitated users' copyright infringement via Kazaa. The court required the Sharman parties to install filters on the software to protect copyright works from unauthorised trading and indicated the parties faced substantial damages.

The parties have two months to comply with the filtering ruling in the case, which was brought when major record labels, including Sony BMG, EMI, Universal and Festival Mushroom, claimed Kazaa was facilitating massive copyright infringement associated with their artists.

In his judgement, Federal Court Justice Murray Wilcox set two conditions on the appeal process. Firstly, the party appealing must aim to be heard in the February 2006 Full Court sittings.

The Full Court -- which hears appeals from decisions of a single judge of the Federal Court -- is scheduled to sit from 13 February to 10 March 2006.

Secondly, any appeal application would depend on whether modifications to Kazaa were approved by the court or agreed by the music labels.

Sharman Networks is expected to lodge its request for leave to appeal before the deadline of three weeks from yesterday's decision expires.

Sharman's lawyer, Mary Still, reiterated through a spokesperson today the company's position last night that it would "appeal those parts of the decision where we were not successful" remained unchanged.

The music industry has signalled plans to secure billions of dollars in damages against the infringing respondents -- which include Sharman Networks, Sharman CEO Nicole Hemming, Brilliant Digital Entertainment, its subsidiary Altnet and the chief executive officer of both outfits, Kevin Bermeister.

These parties were ordered to pay 90 percent of the music industry's legal bills. A separate hearing to determine claims for damages will be held at a later date.

At the start of 2004, the Kazaa Web site said more than 317 million people worldwide had downloaded the software onto their computers.

Michael Speck, a music industry consultant and former head of Music Industry Piracy Investigations (MIPI), confirmed that despite the fact Justice Wilcox knocked out its claims the Sharman parties' conduct amounted to conspiracy, contravention of the Trade Practices Act and direct copyright infringement, the industry would not appeal the decision.

"We're very happy with the judgement," he said, as it covered both the principal companies and principal individuals they were after.

"We're not expecting anything other than Kazaa's compliance with the court orders," he said.

"We would be surprised that Kazaa would want to appeal against the opportunity to become a legitimate business".

The finding is yet another headache for Sharman, which has seen the popularity of the FastTrack network underlying the Kazaa software in deep decline since April 2003.

Win fires up anti-piracy unit
Meanwhile, buoyed by the industry's win over Sharman, MIPI is targeting an expanded role in combating the industry's greatest scourge.

MIPI's new general manager, Michael Kerin, told ZDNet Australia he was preparing a submission to the Australian Recording Industry Association and the body's other stakeholders that would see the unit expand its enforcement activities and take on an educational role as well.

"It's not all about just suing people," Kerin said.

While he declined to detail the exact number of people working for MIPI presently, he did concede it was "less than five".

The proposed expansion would not only allow MIPI to educate people coming in to the music industry, but go into schools as well, he said.

Kerin added that the Kazaa verdict would have no effect on MIPI's strategy of targeting the "facilitators of copyright infringement" rather than end users. MIPI's equivalent unit in the United States, the Recording Industry Association of America (RIAA), has filed more than 14,000 lawsuits against end users since August 2003.

MIPI's activities have attracted the ire of Internet service providers in Australia, with the peak ISP body in July asking members to help contribute to the defence of Perth member Swiftel, which faces Federal Court action over allegations its employees and customers created BitTorrent file-sharing hubs to host thousands of pirated sound and video recordings. That case is expected to come before the court within the next couple of months.