Universal tries to expose Kazaa backers

Recording titan Universal Music is pressing on with its legal battle in Australia to try to force Sharman Networks - Kazaa's parent company - to reveal details of its owners as part of a collusion claim
Written by Abby Dinham, Contributor

Lawyers for Universal Music put the hard word on Sharman Networks -- the company responsible for popular peer-to-peer application Kazaa -- in the Federal Court today, attempting to force the company to reveal its corporate structure and anonymous director. The Universal Music parties' senior counsel, John Nicholas, claimed the company has purposely been set up with no visible line of command to "resist a claim like this".

Sharman was accused of music copyright infringement over its peer-to-peer file sharing software Kazaa, in a move which saw Sharman and affiliated companies' premises raided last February.

The parties are still in the discovery process related to evidence taken in the raids, which is being held by an independent third party. However, Universal has claimed that it is essential to the case to reveal the respondents' ownership and corporate structure.

Nicholas contends that directions were made by presiding Justice Murray Wilcox on 27 July for discovery of Sharman's ownership. However he said "we haven’t been given the information on control, we have been given a list of nominee companies."

"They won't give us the one-line document that your honour requested," he said.

Wilcox described the issue as "absurd", but acting chief counsel for the Sharman parties, Tony Meagher, said the group had identified the directors and the shareholders, and beyond that it "is not relevant to any issue in the proceeding."

However, Nicholas argued that revealing Sharman's owners was important to establish the exact relationship between Sharman and subsequent respondent to the charges AltNet -- a subsidiary of Brilliant Digital Entertainment – as he said the two companies may have colluded to create an anonymous structure for purposeful deception.

"This dichotomy has been created for the purpose of resisting a claim like this. It's part of an arrangement made in 2002 when Mr Burmeister [BDE executive] decided that P2P could be commercially exploited," he said. "This dichotomy was brought about by careful planning and advice."

"The relationship between the Sharman and Alt entities is quite important…two tech companies brought together...one inference is that BDE together with Ms Hemming have incorporated in 2002 Sharman Networks in a way that seeks to conceal the ultimate relationship," said Nicholas. "They are intertwined at a relevant corporate level, they are one and the same."

"At all levels Ms Hemming is doing the beckoning of Mr Burmeister," he said.

A company called Worldwide Nominee has been named as the proprietor of the Sharman group, with Geoffrey R. Gee listed as its director. However, when questioned by Wilcox as to his identity, Meagher replied that "he is a lawyer who lives in the Republic of Vanuatu".

Wilcox concluded that "Mr Nicholas is entitled to get to the bottom of exactly who the client is" adding that he is "in principle" prepared to uphold the request.

AltNet senior counsel, Steven Finch, addressed the charges against the company, stating that it supplied a very different technology to the Sharman product and that "they are not related".

According to Finch, files are not made available on the AltNet file sharing database until an agreement is made with the rights holder of the works and the file is then "wrapped" with digital rights management (DRM) clauses so that down-loaders must agree to a terms of access condition before they are able to open the file.

"Material does not get onto AltNet without the permission of the artist," he said. "Our technology is not used by Kazaa. There is confusion because the database search brings up results from both Kazaa and AltNet."

The parties were directed to sort the issue out away from court.

Additionally Wilcox ordered that all affidavits to be used in the case must be submitted by 20 October – in response to Sharman claims that Universal lawyers have been tardy with their submissions – and that each party must provide the other with a list of objections intended to be made against the affidavits by 19 November.

ZDNet Australia's Abby Dinham reported from Sidney. For more coverage from ZDNet Australia click here .
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