Sydney-based Sharman Networks, the owner of peer-to-peer software Kazaa, has filed an amended counterclaim in the U.S. District Court of California against the music industry, alleging agreements with media companies had been stymied by the industry body.

"We've spoken to record company executives who recognise that P2P provides the most efficient means to profitably distribute licensed music and movie content for a fee over the Internet," said Nikki Hemming, chief executive officer of Sharman Networks. "It's time for these executives to take their business back from their lawyers and steer it into the future of digital distribution."

The amended counterclaim will detail specific information, including names and dates, of U.S. entertainment industry behaviour to boycott Sharman, Altnet (which is partnering with Sharman to provide paid music distribution via P2P) and P2P technology from the market of licensed digital content distribution. Sharman claims they and Altnet had met with senior level industry executives at record companies, including Universal, Warner Brothers Music and Interscope Music, and reached preliminary agreements which were then stymied by industry body directives.

"We remain steadfast in our desire to work with the industry to distribute their content securely using our peer-to-peer technology," said Hemming. "Thousands of content providers across the music, movie, games and software industries have already profited from working with us."

The amended counterclaim also details:

• The nature of Sharman and Altnet's joint enterprise agreement (JEA) which demonstrates that both Sharman and Altnet are equally affected by the anticompetitive behaviour of entertainment industry plaintiffs;
• Collusion of the plaintiffs to apply pressure to advertisers, ISPs and business partners of Sharman and/or Altnet;
• Public smear campaigns to undermine Sharman, Altnet and peer-to-peer technology;
• Restrictive anti-P2P licensing practices by plaintiffs - -Dead End Licenses"ââ,¬" designed to exclude P2P distribution;
• Unfair business practices on behalf of the plaintiffs including breach of Sharman Networks' copyright and privacy provisions to covertly gather information about users of Kazaa.
  

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