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Morpheus vs. Kazaa, The Next Generation
March 27, 2006
Thomas Mennecke
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In a file-sharing world turned upside down, there was Morpheus holding the fledgling P2P community together. Shortly after the closure of Napster in late 2001, the burgeoning FastTrack network provided a near-seamless transition for millions of P2P enthusiasts to continue trading

The two major clients of the time, KaZaA (note the capitalized "Z" and "A") and Morpheus were the mainstream avenues to the FastTrack network. Even during these early days however, the KaZaA client was having difficulty gaining traction as the Morpheus client proved vastly superior.

Morpheus had one glaring advantage over KaZaA - no bitrate restriction. When KaZaA was first distributed, it justified its 128 kb/sec restriction in its EULA (End User Licensing Agreement) by stating its future intentions to distribute legitimate content. This of course didn't go over well with the fledgling FastTrack community, who was accustomed to unfettered access to millions of MP3s on Napster. The result of this restriction was a mass migration to Morpheus.

During February of 2002, Morpheus was the newly crowned king of the P2P world. By this time, ownership of the KaZaA client had shifted from Janus Friis and Niklas Zennstrom (AKA KaZaA BV) to Sharman Networks. KaZaA BV still retained ownership of the FastTrack protocol. Naturally, having their flagship file-sharing client subservient to Morpheus poised a significant threat to any current or future financial venture. This would put into motion a series of events that is suspected of justifying Morpheus' departure from the FastTrack network.

On February 26, 2002, Morpheus users were surprised to discover their favorite client was unable to connect to the FastTrack network. Shortly thereafter, news began to circulate that Sharman Networks and KaZaA BV had intentionally cut off all Morpheus clients from the FastTrack network. From a technological standpoint, this not only came as a surprise but was compounded with bewilderment as Sharman Networks had long argued FastTrack was a decentralized network and therefore uncontrollable.

Yet KaZaA BV would justify Morpheus' departure much more diplomatically. Quite simply, KaZaA developer Niklas Zennstrom told Morpheus (AKA MusicCity) failed to pay their bills.

"MusicCity (also known as StreamCast Networks) has failed to pay any amounts due to Kazaa BV under the parties' license agreement," Kazaa BV founder Niklas Zennstrom wrote in an e-mail to CNET "As a result of MusicCity's breach, Kazaa BV did not provide version 1.5 to MusicCity. Kazaa has also terminated MusicCity's license."

With the new FastTrack stack (version) not provided to MusicCity, existing versions of Morpheus were unable to participate on the network. Furious at this chain of events, Morpheus was a client without a network and was left with little choice other than to switch over to Gnutella. This is like AMD being forced by Intel to sell water pistols.

This was three years ago, and it appears StreamCast Networks is still bitter about how things went down. And who can blame them. Morpheus was well on its way to P2P prosperity, and their world came crumbling down. Three years later, Janus Friis and Niklas Zennstrom created the multi-billion dollar venture known as Skype. Skype is built upon technology very similar in nature to FastTrack, and it could be concluded that StreamCast wants a piece of this action. As a result, StreamCast Networks has filed a lawsuit against virtually all entities related to the FastTrack network. StreamCast filed the lawsuit alleging violations of the RICO (Racketeer Influenced and Corrupt Organizations Act.)

Despite reports stating otherwise, keep in mind StreamCast Networks has not articulated the precise details of this lawsuit. The only comments made so far were released by Charles Baker, lead attorney of StreamCast.

"As has been reported, StreamCast Networks, the developer and distributor of Morpheus P2P file search and sharing software, has filed a lawsuit against Skype and the other named defendants alleging violations of the Racketeer Influenced and Corrupt Organizations Act, and other claims. I am unable to expand upon that at this time other than to say that the Complaint speaks for itself. We will not be providing copies of the Complaint to the media. StreamCast looks forward to litigating this lawsuit. I am a partner at Houston based Porter & Hedges, and I am StreamCast's lead counsel on this case and the MGM case. I'm sorry but at this time we have no additional comments."

Alleging violations under the RICO Act presents a degree of seriousness not typically associated with P2P. Rather, violations of the RICO act are normally reserved for organized crime or other criminal organizations. There is however a civil component of the RICO act that allows a complainant to sue for damages.

"Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefore in any appropriate United States district court and shall recover threefold the damages he sustains and the cost of the suit, including a reasonable attorney's fee, except that no person may rely upon any conduct that would have been actionable as fraud in the purchase or sale of securities to establish a violation of section 1962."

The specifics of the complaint are presently confidential. However the RICO Act prohibits an entity from gaining financial advantage through Racketeering. Racketeering is committed by violating any two of 35 crimes within a 10 year period for a similar purpose. Although Racketeering includes kidnapping and other violent crimes, its suspected StreamCast feels more modest violations occurred that resulted in their departure from FastTrack. StreamCast Networks' RICO lawsuit is composed of many of the past and present characters involved with the development and marketing of the Kazaa and FastTrack technologies.

Niklas "the NiteStick" Zennstrom: Is the 39 year old co-founder of the FastTrack Network, the underlining KaZaA client and Skype.

Janus "the Fist" Friis: Janus is the 29 year co-developer of FastTrack, Kazaa and Skype.

KaZaA BV: The Dutch based KaZaA BV organization is the original company, founded by Janus and Niklas, which owned the intellectual property rights to KaZaA and FastTrack.

Joltid Ltd: Also founded by Janus Friis and Niklas Zennstrom. Bills itself as a bandwidth optimization software solution via its PeerCache and Peer Enabler software.

Joltid Ou Blastoise Ltd: Blastoise is the management company, also founded by Janus and Niklas, that governs 49% of Altnet. Altnet is the piggyback network that delivers authorized content to Kazaa users.

Bluemoon Ou: "Currently, Bluemoon participates in several technology projects at Joltid – a company founded by the original team behind Kazaa and FastTrack."

LA Galiote BV: Little is known about this company, however played a role in the development of the FastTrack/Kazaa protocol.

Indigo Investment BV: Little is know about this company either; however played a role in the development of FastTrack/Kazaa.

Brilliant Digital Entertainment, Inc.: A 3D imaging company that designs graphics for web based content. They also happen to have a 51% interest in Altnet.

Sharman Networks, Ltd.: The beleaguered owners of the FastTrack and Kazaa software. When full ownership went from the consortium of KaZaA BV, Joltid, etc, Sharman renamed KaZaA to Kazaa.

Kevin "the Kane" Bermeister: CEO of AltNet and Brilliant Digital. Claimed ownership of the "file hash" patent in November of 2003.

It’s apparent there’s still a web that still governs at least some aspect of the FastTrack Network. A string of interrelated technologies, AltNet, FastTrack, Skype, are all in some way associated with the above mentioned companies and individuals. Under the RICO Act, StreamCast may sue for “threefold the damages he sustains and the cost of the suit” – a substantial number considering the financial success of Skype and associated FastTrack companies.

This story is filed in these Slyck News categories
FastTrack :: Kazaa
P2P Clients :: Morpheus

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