Focus group: Kazaa will meet Napster's fate

Australia's music industry is suing Sharman for copyright infringement related to the use of Sharman's peer-to-peer software, Kazaa.

One document that stirred some heated objections was an e-mail sent to executives and employees of Sharman Networks and Altnet, one of its partners, regarding the results of an Australian focus group that convened in May 2003 to talk about the use of Kazaa.

The e-mail states that the focus group sees Kazaa's image as a "free music concept" that "would come to an end similar to Napster."

The document said that the focus group perceived Kazaa as having the "largest variety of music and number of users."

Very few of the 18 members of the focus group admitted to having noticed the information placed on the Web site regarding the difference between the so-called Gold and Blue icons, even when "know your icons" was flashing on the screen. The icons are supposed to help users differentiate, among other things, between music that has been determined by Kazaa as legal to download and music that may or may not be legal.

Music files with Gold icons are distributed mainly by Altnet, also a respondent in the case and a peer-to-peer distributor of "legal and licensed secure digital media that originates from content owners." Music files with Blue icons, on the other hand, are provided by Kazaa users. A message on Kazaa.com states that with Blue files, "it is the responsibility of each individual user to responsibly and legally decide which files to share and which are to be downloaded."

The focus-group e-mail said that only one out of all the members of the group downloaded a Gold file, while a few "had heard of them but thought they needed to be paid for."

The e-mail was sent to Sharman's chief executive officer, Nikki Hemming; Altnet's chief executive, Kevin Bermeister; Sharman technical officer Phil Morle; and Altnet's chief technical officer, Anthony Rose, among others.

In the document, the Sharman parties recommended "to educate users about Gold icons," emphasizing that these files are "better-quality files, rights-protected (particularly for local artists) and 80 percent of it (is) free."

Universal Music Australia lead barrister Tony Bannon pushed for the admission of the document, saying that "it is one link in the chain showing (the respondents) are genuinely and specifically aware users are using (Kazaa) as an engine of piracy and they are taking no steps to restrain it. In fact, they are encouraging it."

The party considered putting a "sample a Gold icon link" on the home page for users to test. The document stated that the Sharman parties think the "largest challenge is to step users up from not paying to paying (for the music files)...however, if educated about the benefits, particularly x percent are free, and the content in this range is desirable, the users will be more likely to download, and this download is more likely to become habitual."

Following Justice Murray Wilcox's order to implement a subpoena that releases the documents being held by Sharman Networks parties' former lawyers from Philips Fox, the respondents asked for more time to sort out the documents that need to remain private because of lawyer-client confidentiality.

The respondents agreed to make a list of documents where the legal professional privilege can be waived. It will be presented in court Friday morning. The documents contain the legal advice that Sharman Networks received from Sydney-based Philips Fox regarding copyright infringement.

Justice Wilcox also announced today that closing statements will be held March 22 and 23.

Kristyn Maslog-Levis reports for ZDNet Australia.