However, the company concedes that the ruling is unlikely to have any effect on a music copyright-infringement case currently going through the courts in Australia.
Sharman said that, as consequence of the decision made by the Ninth U.S. Circuit Court of Appeals, it will file a motion for a similar ruling to be held over its U.S. copyright infringement case, with the group's lead counsel for the trial, Rod Dorman, demonstrating a new air of confidence.
"Sharman Networks will be filing a motion for summary judgment nearly identical to the successful motions filed by Grokster and Morpheus, and we are confident that Judge Wilson will find that our product, Kazaa, is a lawful product as well," he said.
Dorman describes the decision as a victory for the technology industry and for fans, artists and owners of entertainment content.
"Entertainment industry executives in the U.S. must now embrace peer-to-peer technology and work with software developers and other partners to commercialize it. It is time for them to take their business back from their lawyers and steer it into the future of digital distribution," Dorman said.
However, Dorman added that the decision will not set a precedent for a case underway in Australia, in which Sharman Networks is facing music copyright infringement charges related to its Kazaa software. The action was brought by Universal Music Australia and numerous Australian record companies. After six months of hearings, the case is still in the early stages of evidential discovery.
"The doctrines of vicarious and contributory copyright infringement have been established in the U.S. by the courts," Dorman said. "Although analogous doctrines are recognized by Australian courts, the principles to be applied are not identical."
Yet Dorman adds he expects the Australian court will consider the U.S. appeals court's line of thought and decision in its deliberations.
"Regardless, the reasoning of the Ninth Circuit decision is powerful, sound and persuasive. In addition, and more importantly, we are a global community, and there should be consistent doctrines governing the application of copyright law to the Internet worldwide," he said.
The public face of Sharman Networks, CEO Nikki Hemming, describes the decision as a "fantastic result" for the peer-to-peer community, which she said reinforces similar decisions in other courts around the world that peer-to-peer software is legal.
"Our message to the entertainment industry is to stop litigating and start partnering with us. Legislation is not the answer, commercialization of P2P is," she said.
Sharman Networks was back in Australian court last Wednesday to continue negotiations over evidence access and procedural matters. No firm court date has been set; however, presiding Justice Murray Wilcox has set a tentative trial date of Nov. 29.
Abby Dinham of ZDNet Australia reported from Sydney.