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However, Australia's peak music industry body, the Australian Record Industry Association, lashed the move as failing to achieve compliance with the orders and said the operators of Kazaa had no choice but to shut down.
ARIA chief executive, Stephen Peach said today: "Sharman has thumbed its nose at the court.
"They were given a chance to do the right thing and they've ruined it," he said. "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".
However, 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," while existing users who launch their application are greeted with the following warning: "ATTENTION USERS IN AUSTRALIA: To comply with orders of the Federal Court of Australia, pending an appeal in the (sic) 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".
The KMD is a peer-to-peer service used largely for the sharing of music files - whether copyright or unrestricted -- within a community of users.
It is understood the KMD Web site will remain inaccessible to Australian users at least until at a decision is made in the appeal by Sharman and associated parties against the orders. The appeal is due to be heard from 20 February next year.
On 5 September, after an 18-month battle, the Court found in favour of about 30 music labels by ruling that Sharman and associated parties had authorised users of Kazaa to breach copyright.
As a result, Sharman was ordered to install a keyword filtering system in Kazaa by 5 November that would prevent copyright-infringing behaviour by users in the leadup to the appeal. The court then granted a further extension until 5 December.
However, in a technical conference between Sharman and the music industry between 10 October and 24 November the parties discussed the use of more effective measures than keyword filtering, with so-called "audio fingerprinting" software raised as an option. It is understood that the music industry opted not to attend a second proposed conference. On 24 November, the Federal Court ordered Sharman to release a new version of the KMD including a non-optional filter that excluded from search results 3,000 keywords -- including 'Madonna' and 'Eminem' -- and implement dialogue boxes on the Kazaa Web site pressuring users to obtain the updated release.
If the Sharman parties are successful in their appeal, the site is expected to be reopened sometime after with audio fingerprinting -- most likely the Audible Magic software -- employed to block illegal behaviour on the peer-to-peer network.
However, ARIA issued a statement saying Sharman's actions yesterday amounted to a refusal to apply the keyword filter to its software and that the record companies would "return to court to enforce the orders of the copyright judgement". ARIA included a quote by Federal Court Justice Murray Wilcox from a 10 October hearing into establishing the keyword filtering saying "...if that doesn't happen...they will get no sympathy from me and there will not be an extension beyond 5 December, even if that means closing down the Kazaa system".
A Sharman Networks spokesperson said "All activity that could be deemed as authorising 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.
"The Australian record company case is funded by their international associations and parent companies, so we understand their disappointment at the localised effect of this ruling," the spokesperson said.