According to a document entitled "Kazaa Technology 2004", written by Phil Morle, Sharman needs to be careful about installing too much adware on the user's computer upon the installation of the Kazaa software.
The document said the adware "slows down users' machines and can affect other activity such as browsing the Internet". Morle added in his statement "We are also adding increasing p2p networks to the users' machines. These are good value to users but they use more resources and create confusion for users as to what resources they are sharing and where this can be controlled."
Morle continued saying that these two issues could be reasons why Kazaa "lose users by over-stepping the mark" and that the company should base this by looking at how many employees at Sharman Networks refuse to install the p2p software.
"Consider how many people that work for Sharman Networks and its partners that hate installing Kazaa on their machine," Morle said in the document.
Australian record labels Universal Music Australia, EMI, Sony/BMG, Warner, Festival Mushroom and 25 additional applicants are suing Sharman and associated parties -- including Brilliant Digital Entertainment, Altnet, Sharman Networks CEO Nikki Hemming and others -- over alleged music copyright infringement made through the Kazaa software.
The document also stated the company's awareness of the legal risks involved with the technology.
"Our competitors are taking risks legally, but delivering compelling consumer solutions. We need confidence in what we do and must take similar leaps of faith. eDonkey is not yet being sued and is in a strong position to out-innovate us," Morle wrote.
The Australian record companies believe that Sharman is misrepresenting when it claimed that "the performance of a personal computer will not be, or is unlikely to be, noticeably affected by its functioning as a supernode for the purposes of the Kazaa software."
The document is part of the bundle for which a request for confidentiality was rejected by Justice Murray Wilcox this week.