News from the Music Industry

Federal Court Judge Murray Wilcox ruled that Kazaa’s Australian owner and developer, Sharman Networks, had not itself breached copyright but had encouraged millions of Kazaa users worldwide to do so.

“The respondents have long known that the Kazaa system is widely used for the sharing of copyright files,” said Wilcox in his ruling in a Sydney court.

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The decision follows a similar judgement in June in which the U.S. Supreme Court ruled that file-sharing networks such as Grokster can be held liable if their intent is to promote copyright infringement of music or movies.

“The message is very clear for P2P services: It’s time to go legal,” said John Kennedy, chief executive of the International Federation of the Phonographic Industry (IFPI). “Today’s judgement shows that Kazaa—one of the biggest engines of copyright theft and the biggest brand name in music piracy worldwide—is illegal.”

Peer-to-peer (P2P) networks distribute data between users instead of relying on a central server.

Sharman Networks said it was disappointed with the judge’s decision, and that it planned to appeal.