Sharman cuts off Kazaa downloads in Australia

The shutdown, undertaken to comply with orders from Australia's Federal Court, took effect late Monday in Australia. While people with an Australian IP address who have already downloaded Kazaa can continue to use it, Sharman is warning them not to do so.

New users who attempt to access the Kazaa Web site from Australia are directed to a notice stating: "The download of the Kazaa Media Desktop by users in Australia is not permitted." Meanwhile, existing users who open up their application on their desktop are greeted with a warning stating: "Attention users in Australia: To comply with orders of the Federal Court of Australia, pending an appeal in February 2006, use of the Kazaa Media Desktop is not permitted by persons in Australia. If you are in Australia, you must not download or use the Kazaa Media Desktop."

Kazaa is a peer-to-peer service used largely for sharing music files, whether copyright or unrestricted.

The Kazaa Web site is expected to remain off-limits to Australians at least until a decision is made in the appeal from Sharman and associated parties. The appeal is due to be heard in February.

In deciding a civil lawsuit brought by about 30 music labels, the Federal Court of Australia ruled in September that Sharman and associated parties had authorized Kazaa users to breach copyright. The court ordered Sharman to install a keyword-filtering system in Kazaa by Nov. 5 that would prevent copyright-infringing behavior by users. The court then granted a further extension until Dec. 5.

However, Sharman and the music industry had during a conference discussed the use of more effective measures than keyword filtering, with so-called "audio fingerprinting" software raised as an option. The music industry is believed to have opted not to attend a second proposed conference.

If the Sharman parties are successful in their appeal, the site is expected to be reopened with audio fingerprinting--most likely the Audible Magic software--used to block illegal behavior on the peer-to-peer network.

A Sharman Networks representative said, "All activity that could be deemed as authorizing has stopped so as to comply with the court orders, pending the imminent appeal in February. The Australian record companies have achieved their aim to stop the further distribution of Kazaa in Australia until an appeal court decides whether these orders should stand or not."

However, Stephen Peach, chief executive of the Australian Record Industry Association, criticized the move.

"Sharman has thumbed its nose at the court. They were given a chance to do the right thing and they've ruined it," Peach said in a statement. "They cannot be trusted to even take the simplest steps towards complying with the court's orders and again have shown they intend to do nothing about the illegal activities occurring on a massive scale on their system."

Long legal battle
Sharman Networks, associated companies and major record labels have been at loggerheads over Kazaa for more than three years.

In 2002, Kazaa was the most popular file-sharing software on the Internet. The record labels alleged millions of copyright infringements were occurring each day on the network.

The battle began in earnest in Australia in February 2004. Music Industry Piracy Investigations (MIPI), a division of the Australian Record Industry Association (ARIA), seized hard drive images and other documents from the Sydney offices of Sharman, associated company Altnet and the homes of Sharman executives under a court-sanctioned civil search order.

The seized materials were crucial to the record labels' evidence against Sharman in the subsequent Federal Court action, which began in November 2004.

The labels alleged Sharman and Altnet had conspired to attract thousands of copyright infringers to Kazaa, and profited from advertising revenue. Altnet operates a search system within the Kazaa Media Desktop.

Sharman argued that it was unable to filter copyright materials involved in the Kazaa software, while the labels said Sharman encouraged people to infringe copyright through the design of the peer-to-peer software, and by promoting it with terms like "free music."

Lawyers for Sharman argued the company had never authorized copyright infringement. Users received copyright notices as part of Kazaa, according to Sharman, and the decentralized nature of the peer-to-peer application made controlling and monitoring users almost impossible.

The company called several academic witnesses during the trial who testified that filters would be ineffective in preventing copyright-infringement, as users would soon find ways to circumvent them. The academics also testified that peer-to-peer applications, such as Kazaa, were capable of substantial non-infringing use.

The record labels also attacked the ownership structure of Sharman, which is registered in Vanuatu for "tax reasons."

Sharman purchased the Kazaa software from Dutch company, Kazaa BV, in 2002.

Iain Ferguson reported for ZDNet Australia from Sydney.
ZDNet's Steven Deare contributed to this report.