Attorney Tony Bannon told a federal court hearing, presided over by Justice Murray Wilcox, in Sydney that 100 million people use Kazaa software to share about 3 billion unauthorized sound recordings per month.
Major record labels Universal Music Australia, EMI, Sony/BMG, Warner, Festival Mushroom and 25 additional applicants are suing Sharman Networks and associated parties--including Brilliant Digital Entertainment, Altnet, Sharman CEO Nikki Hemming and others--over alleged music copyright infringement made through the Kazaa software.
Sharman Networks has, during the pretrial phase of the action, said it has no control over what the Kazaa users do with the files and that it is not responsible for the uploading of the songs.
However, Bannon said Sharman Networks is fully aware of how the software is used and is doing nothing to inhibit the infringement.
Sharman Networks make profit "by selling advertising space on the computer screens of the users while they are in the very act of infringing copyright. It was their software which they adapted or designed for their purposes and which they keep updating and finessing--updates which do not make infringements harder but easier. They are perfectly capable of taking steps to inhibit infringing activity," Bannon said.
Bannon also lashed out at the latest version of the Kazaa software, released last week, which Sharman said lets people make free online calls to anywhere in the world. Kazaa v3.0 includes the integration of Skype, which allows long-distance phone calls using P2P technology.
Bannon said the Kazaa v3.0 is "the robbers' reward" and that it does nothing to inhibit copyright infringers.
"Kazaa version 3 provides delightfully contemporaneous evidence that the respondents give their blessing to the copyright-infringing ways of their users. Indeed, they reward them with a new and better product to continue their robbing ways," Bannon said.
Universal Music Australia also raised the issue of the "true ownership" of Sharman Networks. Bannon said there is "ready inference that Kevin Bermeister (Altnet's chief executive) is in fact the ultimate controller of Sharman."
He added that Hemming is "misleading" the public when she claims to fill the position of chief executive.
"Hemming told the press that there were private individual investors behind Sharman. In answers to interrogators ordered by this court, she said that in truth, there were no investors and that she was only trying to make the company appear to be substantial. It follows that she made a false public statement that there were investors behind the company. In short, she is not the CEO, and the apparent shareholders are not the real controllers," Bannon said.
Bannon said Brilliant Digital Entertainment--the parent company of Altnet--and Consumer Empowerment BV--which later changed its name to Kazaa BV--entered into a technology bundle license agreement in 2001. Kazaa BV and Sharman Networks then entered into a license agreement in 2002, which stated that Kazaa BV had agreed to sell its business to Sharman Networks.
Sharman Networks' attorney is scheduled to offer its opening statement on Tuesday. The trial is expected to last three weeks.
Kristyn Maslog-Levis of ZDNet Australia reported from Sydney.