The Federal Court of Australia has ruled that the Kazaa internet peer-to-peer file sharing system infringes copyright – a decision that seems to put another nail in the coffin for all similar file sharing networks that carry shared music, films and other content.
The Australian ruling comes after a recent US Supreme Court copyright ruling against file sharing network Grokster.
Both cases were brought by the music industry, with the Australian action brought by record companies including Universal Music, EMI, Sony and Warner.
The Australian court not only considered Australian law but English law, which it closely mirrors.
It had been thought that English law might offer protection to P2P networks following a ruling in favour of Amstrad in the 1980s, where it was held that the makers of tape-to-tape decks were not responsible for illegal copying of music by users of the machines.
This apparent protection must now be seriously in doubt, according to Ian De Freitas, a partner with City law firm Berwin Leighton Paisner.
“The likely result of the Kazaa and Grokster decisions is that P2P software providers will be forced to collaborate with copyright owners or face extinction”, said De Freitas. “Businesses based on P2P systems which share copyright works are likely to be seriously affected.”
The Kazaa software allows users to create a virtual network to share music files held on millions of computers around the world.
The Australian court decided that, in supplying the software, Sharman Networks and its partners Altnet had authorised the users of the software to infringe copyright, and so were infringers themselves.
Echoing the Grokster decision, the judge found that Sharman and Altnet knew that the software was widely used to share infringing copyright files.
Notices to users of the software that they should not infringe copyright were known by the defendants to be ignored and completely ineffective, said the court.
The judge has given the defendants two months and two options to put matters right.
They can either put in place copyright filtering software for all new users of Kazaa and place maximum pressure on existing users to upgrade to the new filtering version, or limit the Kazaa system to produce search results for licensed works only.
The defendants also face compensation claims for past infringements.