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Australian Federal Court Judge Murray Wilcox has ruled that Kazaa owner Sharman Networks and its principals are guilty of copyright infringement.

Judge Wilcox declared that Sharman Networks Ltd, LEF Interactive Pty Ltd, Altnet Inc, Brilliant Digital Entertainment Inc, Nicola Anne Hemming and Kevin Glen Bermeister "have infringed the copyright" of the 30 or so music labels and copyright owners who brought the case against them. Furthemore, he said, the defendants "authorised" Australian Kazaa users to "make a copy of the sound recordings" and to "communicate the recordings to the public".

"The files are shared without the approval of the relevant copyright owner," said the Judge in his summary of the case. "It follows that both the user who makes the file available and the user who downloads a copy infringes the owner’s copyright."

Judge Wilcox was unmoved by Kazaa's incorporation of "warnings against the sharing of copyright files", stating that "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".

He also noted the defendants had not "taken any action to implement... technical measures... that would enable the respondents to curtail – although probably not totally to prevent – the sharing of copyright files".

The defendants were banned from offering their P2P file-sharing systems in Australia until they modify the software essentially to exclude copyright works from searches. The modification must come in the form of a "non-optional key-word filtering technology", and the company must place "maximum pressure" on existing Kazaa users to upgrade to the modified version of the software. Sharman has a grace period of two months before it must comply with the order.

The judge dismissed claims that the defendants had contravened Australia's Trade Practices Act of 1974, the Fair Trading Act of 1987 and had violated the tort of conspiracy. "The evidence does not support either the Trade Practices Act or conspiracy claims," he said. "Those claims will be rejected."

The judge said he plans to order the infringing defendants not to violate the plaintiffs' copyright in future.

The judge's ruling, posted this morning, follows months of deliberation of evidence from the music industry and Sharman networks.

The case came to public attention in February 2004, when Music Industry Piracy Investigations (MIPI), a body affiliated to the Australian Recording Industry Association (ARIA), raided Sharman's HQ and the premises of related companies and their executives in pursuit of evidence that it believed would demonstrate Sharman's culpability for the copyright infringement being carried out via the Kazaa P2P network.

The parties spent much of 2004 arguing about the relevance of the material seized, so the case did not come to trial until November 2004. The evidence was heard during a series of hearings running through to March 2005. Since then, Judge Wilcox has been pondering the evidence before announcing his verdict. ®

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