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Kazaa Appeal Underway
February 20, 2006
Thomas Mennecke
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In September 2005, the ARIA claimed a great victory over Sharman Networks. Like General George Patton rolling into North Africa, the ARIA’s public relations campaign stormed through the online media with news of its success.

“The music industry recently scored a significant win in its battle against illegal internet downloading. In a landmark decision, which will have global repercussions, the Federal Court of Australia held that the owners and operators of the Kazaa file sharing network were liable for the millions of copyright infringements which occur daily through illegal free downloading of recordings via that network.”

The ARIA was not alone in its praise of the September ruling. The IFPI (International Federation of Phonographic Industry) also commended the ruling, stating “IFPI today welcomed a landmark court judgment establishing that the internet peer-to-peer operator Kazaa is illegal.”

Oddly enough, despite all the clamoring of victory, the ARIA decided to appeal the September 5th ruling – a strange move for an organization that was so publicly confident. It was also a strange move considering Michael Speck, director of the MIPI (Music Industry Piracy Investigations), stated on the steps of the Federal Courthouse the ARIA would not appeal. So what’s gone wrong?

Although the ARIA did have a positive experience on September 5th, their victory has slowly eroded. The ARIA lost on five of the seven points of the case, as articulated in Judge Murray Wilcox's decision. The ARIA did convince Judge Wilcox that Sharman Networks authorized copyright infringement, however the conspiracy and personal infringement charges were thrown out. With the word "failure" now being associated with the ARIA's efforts, they need those five points back.

The most glaring example of the ARIA's failure is that Sharman Networks, the FastTrack network and Kazaa Media Desktop all remain intact. FastTrack is no closer to becoming a filtered network today than it was last year, and Kazaa’s functionality remains unchanged. Since the ruling, the ARIA has been uncharacteristically quiet, with no press release or media interaction on their appeal.

It has become evident since September court proceedings have not favored the ARIA. The ARIA infuriated presiding Judge Murray Wilcox in November for not participating in the second concave meeting. The concaves were meetings designed for both the ARIA and Sharman Networks' technical crews to discuss the filtration of the Kazaa Media Desktop client. When the ARIA suddenly canceled the second meeting at the last minute, Judge Wilcox told the ARIA lawyer responsible for canceling the meeting that he “shot himself in the foot.” Judge Wilcox granted a stay to his original order until February 2006 for Sharman to work on a permanent filtering solution.

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The ARIA also failed to immediately bring contempt charges against Nikki Hemming, CEO of Sharman Networks. The ARIA felt Sharman Networks did not honor the original court order to expand their key word filter to include 3,000 copyrighted works. Judge Wilcox refused to rule on the complaint, and later decided to incorporate the contempt complaint into the appeal before the Full Court.

And that's where we stand today. Opening arguments began in Sydney, Australia where three Judges will decide the fate of not only Sharman Networks, but that of the ARIA. Both appeals are being handled by the Full Court, presided by Justice Branson, Justice Finkelstein and Justice Lindgren. Unlike the year and a half marathon thus far, testimony will only be argued over five days.

It appears after the first day of testimony, the ARIA is not fairing much better. Sharman Network’s lead council, John Ireland blasted the ARIA's main arguments, while proclaiming Judge Murray Wilcox was misled.

The court heard how Wilcox J, the judge who presided over the original case, could be forgiven for his original decision because, as Mr. John Ireland QC, Sharman’s counsel, said: “he was led down the garden path by the record companies”.

Also a statement of interest, Judge Branson queried whether the ARIA simply alerted Sharman networks they had a problem with infringement taking place on the FastTrack network.

Justice Branson queried if the music companies ever approached Sharman Networks to alert them to the fact they had a problem with their sound recordings being infringed by people using the Kazaa software, as would be expected in any business situation before any problem escalates into costly litigation.

“Had they ever offered a list [of sound recordings that were being infringed by users of the Kazaa software]?”, Justice Branson asked.

“No, they hadn’t,” Sharman’s counsel replied. “There was no gentlemanly discussion or dialogue”


Arguments will close this Friday. At this point, it’s likely the decision will give Sharman Networks the ability to conduct business in a manner that respects copyrights, while forcing the ARIA into negotiations. This is what Sharman Networks has always wanted, and what the September 5th ruling almost gave. The inability to negotiate with the ARIA prevented any kind of licensing agreement, but that may change come Friday.


This story is filed in these Slyck News categories
Legal/Courtroom :: Developer Lawsuits

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