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Long Awaited Kazaa Verdict Announced

Postby Nick » Mon Sep 05, 2005 10:34 am

In a mixed ruling, the court dismissed allegations of breaches of trade practice legislation (fair trading), conspiracy and direct copyright infringement against Sharman, instead concentrating on the service to users provided by Kazaa.

In essence Judge Murray Wilcox acknowledged that whilst Kazaa did not directly communicate copyright works themselves, he considered that "The respondents authorized users to infringe the applicants’ copyright in their sound recordings".

The defendants reasoned that they had no control over how their technology was used, rather simplistically likening their use of the P2P network to the use of a photocopier or a tape recorder, although conveniently glossing over the fact that they profited from substantial advertising revenue as a consequence.

In his summary Judge Wilcox stated that the disclaimer exhibited to users of Kazaa was insufficient to deter users from downloading copyright material and that Sharman were fully aware of the use to which their software was being put. He considered that the respondents had done far too little to discourage such use and had instead actively promoted a campaign which attacked the record companies for their stance on copyright.

Turning to the Australian Copyright Act, Justice Wilcox deemed that Sharman, not being the owner of the copyright and without the license of the copyright owner, effectively authorized other people to commit infringing acts.

A mixed ruling in many ways, as the court stopped short of ordering the shutdown of Sharman Networks, instead ordering them to alter their software and to apply "maximum pressure" on their existing users to upgrade their software to a new filtered version.

This alteration means that filtering code will have to be incorporated to prevent the trading of copyrighted music works. Judge Wilcox acknowledged that Sharman "probably cannot totally prevent copyright infringement by users.”

Damages have yet to be assessed, although Judge Wilcox ruled that Sharman pay 90% of the record companies’ legal costs.

The record industry inevitably hails this as an unqualified success, with spokesman Michael Speck saying that “the court’s ruling confirms that people who misuse technology should not be able to profit from the creative work of others."

Rather predictably Sharman claimed that the case was a win for both sides, stating, “we will appeal those parts of the decision where we were not successful and are confident of a win on appeal."

With many Kazaa users having migrated to other P2P networks, this ruling will have limited impact for them, concerning only Kazaa itself and being confined to Australia.

Full details http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/1242.html
Last edited by Nick on Mon Sep 05, 2005 11:12 am, edited 1 time in total.
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Postby Skel » Mon Sep 05, 2005 10:45 am

good read. Good write thank you very much :D
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Postby lordfoul » Mon Sep 05, 2005 10:46 am

This may well be a blow to Sharman, but it hardly seems a real blow to the future p2p.
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Postby Nick » Mon Sep 05, 2005 11:10 am

Thanks. Bit of a team effort there. Further details on this ruling for those who want to see it:
http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/1242.html
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Postby SlyckScratch » Mon Sep 05, 2005 11:15 am

So its the business model that will need to be changed, with a de-emphasis on infringing files and a huge emphasis on filtering. According to Australian IT, Kazaa has 2 months to update their client to include the copyright file filtering system. 2 months eh? lol

Anne Flahvin, senior associate with law firm Baker and McKenzie wrote:The judge in this case has bent over backwards to give some direction as to what they need to do to keep on the right side of the law.


Great. Everyone knows where they stand now to stay nice and legal :D

Thanks Rocketman05, nice article
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Good one

Postby Rocket_baby » Mon Sep 05, 2005 11:41 am

Like the message being sent there rocketman. Keep me posted on more news from that one! :D
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Postby ilbozo » Mon Sep 05, 2005 11:48 am

Nice work RM05.
I have to say I am happy Sharman got the ruling they got. It works for p2p companies, as long as they follow what is outlined by the judge that is.
At least they weren't found guilty of copyright infringement. We surely would have seen some apps get scared and maybe drop off, even if the ruling is only in Oz.
Lets hope that this does leave kazaa as bait for a bit longer in the other countries though!
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Postby Drake » Mon Sep 05, 2005 12:41 pm

This is bad news. Pretty soon the RIAA/MPAA will try to force every P2P developer to implement filters.

But Wilcox said that Kazaa's distributors actively encouraged users to share files, the vast majority of which were copyright material.


How did he come to that conclusion? I hope they appeal this verdict.
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Postby ksaturn123 » Mon Sep 05, 2005 12:44 pm

Glad to see a judge issue a fair ruling for both sides. It protects the assets of the music industry as well as sharmans. Hope to see more fair decisions in the future. Not exactly the decision I wanted to see, but close enough to the middle I can't cry foul this time :)
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Postby AussieMatt » Mon Sep 05, 2005 1:18 pm

Drake wrote:
But Wilcox said that Kazaa's distributors actively encouraged users to share files, the vast majority of which were copyright material.


How did he come to that conclusion? I hope they appeal this verdict.


From the Judgement of Judge Wilcox

I have concluded that this more limited claim is established against six of the ten respondents. My reasons may be summarised in this way:

(i) despite the fact that the Kazaa website contains warnings against the sharing of copyright files, and an end user licence agreement under which users are made to agree not to infringe copyright, it has long been obvious that those measures are ineffective to prevent, or even substantially to curtail, copyright infringements by users. The respondents have long known that the Kazaa system is widely used for the sharing of copyright files;
(ii) there are technical measures (keyword filtering and gold file flood filtering) that would enable the respondents to curtail – although probably not totally to prevent – the sharing of copyright files. The respondents have not taken any action to implement those measures. It would be against their financial interest to do so. It is in the respondents’ financial interest to maximise, not to minimise, music file-sharing. Advertising provides the bulk of the revenue earned by the Kazaa system, which revenue is shared between Sharman Networks and Altnet.
(iii) far from taking steps that are likely effectively to curtail copyright file-sharing, Sharman Networks and Altnet have included on the Kazaa website exhortations to users to increase their file-sharing and a webpage headed ‘Join the Revolution’ that criticises record companies for opposing peer-to-peer file-sharing. They also sponsored a ‘Kazaa Revolution’ campaign attacking the record companies. The revolutionary material does not expressly advocate the sharing of copyright files. However, to a young audience, and it seems that Kazaa users are predominantly young people, the effect of this webpage would be to encourage visitors to think it ‘cool’ to defy the record companies by ignoring copyright constraints.


This seems similar to the Grokster case in that fact the Sharman Networks encouraged infringement in Judge Wilcox's opinion.
Last edited by AussieMatt on Mon Sep 05, 2005 1:29 pm, edited 1 time in total.
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Postby SlyckScratch » Mon Sep 05, 2005 1:24 pm

Drake wrote:I hope they appeal this verdict.


Kazaa solicitor Mary Still said the company was "confident of a win on appeal".
I know what you're thinking, punk. You're thinking, 'Did he use six superfluous adjectives or only five?' To tell the truth I forgot myself in all this excitement - but as I deal in English, the most powerful language in the world with subtle nuances that may blow your head clean off, you've got to ask yourself one question: 'Do I feel loquacious?' Well do you punk?
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Postby irish » Mon Sep 05, 2005 1:28 pm

Good stuff rk05. You're doing a great job in reporting the news :wink:

Now, from the bbc.
Although the ruling is only enforceable in Australia, the record industry has hailed it as a victory that would resonate around the world.
Once more, we get verifiable proof that this industry is living in cuckoo land.


The judge dismissed as "overstated" accusations that Kazaa's owners were infringing copyright themselves.
Another point to show that the industry lawyers would be better suited to writing imaginative short stories than putting together cases.

Kazaa's owners were ordered to modify the software within two months to include filters designed to stop the sharing of copyright material.
2 months of extra kazaa downloading everybody! That is if you actually still use kazaa.
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Postby no_dammagE » Mon Sep 05, 2005 1:34 pm

oh, no, save kazaa!

I opened a bank account in Swiss, please donate. Of course all of the money will go to Sharman to save the best p2p service of the world !!!1111oneelevenone. Why such an account is needed? All the money is somewhere on Bahamas or whatever where no Australia is. Save Sharman, he needs your help :roll:

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That won't have any impact on any p2p party except Sharman. The judge said that the disclaimer didn't properly warn user about copyright infrigement. In the end it is relatively the same as in the United States of Ambition.
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Postby Thylacine » Mon Sep 05, 2005 2:13 pm

irish wrote:
Now, from the bbc.
Although the ruling is only enforceable in Australia, the record industry has hailed it as a victory that would resonate around the world.
Once more, we get verifiable proof that this industry is living in cuckoo land.




It isn't cuckoo land.

Precedents can be considered either 'binding' or 'persuasive'.

'Binding' precedents MUST be followed, for instance, a decision made in the supreme court is 'binding' to a local court, because a local court doesnt have the authority to override it.


'Persuasive' means courts should use the decision when making future decisions, but the courts have authority to make considerations based on circumstances.


Even in other countries, precedents can be cited by lawyers in their defence from other countries, and be held as being 'persuasive' because the conditions and circumstances are similar.

I gurantee, that because US, Australian, UK, and most European law is so similar, this case will be cited by the Industry lawyers as a 'persuasive' precedent.
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Postby Sylph420 » Mon Sep 05, 2005 2:30 pm

rocketman05 wrote:In a mixed ruling, the court dismissed allegations of breaches of trade practice legislation (fair trading), conspiracy and direct copyright infringement against Sharman, instead concentrating on the service to users provided by Kazaa.


AussieMatt wrote:This seems similar to the Grokster case in that fact the Sharman Networks encouraged infringement in Judge Wilcox's opinion.


Agreed.

rocketman05 wrote:Thanks. Bit of a team effort there. Further details on this ruling for those who want to see it:
http://www.austlii.edu.au/au/cases/cth/ ... /1242.html


Not coming up for me ... is the page down already?

irish wrote: 2 months of extra kazaa downloading everybody! That is if you actually still use kazaa.


blek ... No thanks! I stopped using Kazaa around the time the RIAA were first shooting lawsuits. :)

(iii) far from taking steps that are likely effectively to curtail copyright file-sharing, Sharman Networks and Altnet have included on the Kazaa website exhortations to users to increase their file-sharing and a webpage headed ‘Join the Revolution’ that criticises record companies for opposing peer-to-peer file-sharing. They also sponsored a ‘Kazaa Revolution’ campaign attacking the record companies. The revolutionary material does not expressly advocate the sharing of copyright files. However, to a young audience, and it seems that Kazaa users are predominantly young people, the effect of this webpage would be to encourage visitors to think it ‘cool’ to defy the record companies by ignoring copyright constraints.


I never knew holding an opinion and submitting valid points for said criticism was punishable in a court of law? Did Australia become a totalitarian state while I wasn't looking?
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Postby Christopher » Mon Sep 05, 2005 3:16 pm

Drake wrote:This is bad news. Pretty soon the RIAA/MPAA will try to force every P2P developer to implement filters.

How did he come to that conclusion? I hope they appeal this verdict.


And they will find out what people like Microsoft, Bram Cohen, and the makers of Overnet and EDonkey already know, that it is IMPOSSIBLE to filter these networks.
The only thing you would have to do in order to get around any name based or hash-based filter is 1. change the name of the file to something totally different from what it actually is, and 2. add white noise to music or fake files to a zip that is shared.

This was the wrong ruling. Even my 55-year old, very law-abiding parents said it, because they realized like me, that there was going to be no way to filter these networks without onerous restrictions that would make people migrate to open-source file sharing software.

The right ruling would have been to dismiss the case, period. Yes, KaZaA was getting money from ad revenue, but there are MANY places with illegal or immoral content that get money from ad revenue, and you don't see the governments going after them.
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Postby gregorio » Mon Sep 05, 2005 3:50 pm

Sharman is so screwed, they will have to stop distributing their software completely. They will never be able to come up with a filter in 2 months.
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Re: Long Awaited Kazaa Verdict Announced

Postby vtwin0001 » Mon Sep 05, 2005 4:13 pm

Michael Speck wrote:the court’s ruling confirms that people who misuse technology should not be able to profit from the creative work of others.


Yeah... Britney Spears "creative" hahahahahahah :lol: :lol: :lol: :lol:
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Postby Nick » Mon Sep 05, 2005 4:15 pm

Thylacine said
I gurantee, that because US, Australian, UK, and most European law is so similar, this case will be cited by the Industry lawyers as a 'persuasive' precedent

I would not agree that Australian law has that much in common with US law, or that the specifics of this particular case would favour its' use as persuasive precedent.
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Postby BasicTek » Mon Sep 05, 2005 4:21 pm

Christopher wrote:And they will find out what people like Microsoft, Bram Cohen, and the makers of Overnet and EDonkey already know, that it is IMPOSSIBLE to filter these networks.
The only thing you would have to do in order to get around any name based or hash-based filter is 1. change the name of the file to something totally different from what it actually is, and 2. add white noise to music or fake files to a zip that is shared.


I'm more worried about a protocol filter. If they win against kazaa then they will likely move to make laws telling ISP's to block protocols from illegal programs. If they block protocols it won't matter what format a file is in.

First Kazaa and then they'll try the same with everything else (bittorrent ed2k). That won't be a good thing.
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Postby Kamineko » Mon Sep 05, 2005 4:30 pm

Yeah, right. Filtering KaZaA just reeks of working. Uh-huh. I'm sure the remaining KaZaA user is gonna be devastated. ._.

And if they filter the protocol... well, we'll just have to make our OWN protocol! Again! Or at least someone with a little bit more mojo than me will. Hopefully.
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Postby Psycho Ced » Mon Sep 05, 2005 4:55 pm

Damages have yet to be assessed, although Justice Wilcox ruled that Sharman pay 90% of the record companies’ legal costs.

Thats got to suck! And some people think the **AA loses money when they sue.


lordfoul wrote:This may well be a blow to Sharman, but it hardly seems a real blow to the future p2p.


LMFAO :lol:

Great article RM5 .... Tom Who? :twisted: (j/k :P )
Look forward to reading more
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Postby SlyckScratch » Mon Sep 05, 2005 5:34 pm

I know what you're thinking, punk. You're thinking, 'Did he use six superfluous adjectives or only five?' To tell the truth I forgot myself in all this excitement - but as I deal in English, the most powerful language in the world with subtle nuances that may blow your head clean off, you've got to ask yourself one question: 'Do I feel loquacious?' Well do you punk?
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Postby irish » Mon Sep 05, 2005 5:45 pm

It isn't cuckoo land! :roll: Ah well, this is.
That's a persuasive link scratch :wink:
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Postby razorpop » Mon Sep 05, 2005 6:29 pm

Rocketman, excellent coverage and followup comments on the limited applicability to the US.

Still, the ruling is chilling in its clear anti-technology and anti-consumer aspects, which could just as easily apply to instant messaging software, broadband Internet access, or other technology that can be misused.

* The ruling does not make individuals responsible for their use of Kazaa software.
* The ruling forces Kazaa to be responsible for and directly control the use of the software.
* The ruling criticized Kazaa for attacking the major record companies and their stance on copyright. So much for free speech.


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