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Try and wrap your head around this one. Sharman Networks - the big daddy behind the Kazaa P2P software - and its CEO have filed a lawsuit against the pro P2P news site P2Pnet.

Jon Newton, the owner of P2Pnet, revealed this week that he was being sued for libel, although he said little else about the situation for obvious reasons. P2Pnet is based in Canada, so El Reg did some online digging through court filings and found file VLC-S-S-063039. The case summary states that Sharman Networks has filed a lawsuit against Newton, two Jane Does, two John Does and P2Pnet's hosting company InterServer Inc.

We're still waiting for the rest of the court documents to arrive, and will fill you in on the complaint as stated when they come. [Update: The documents have arrived and are available in PDF here.] In the meantime, Sharman provided us with a statement that helps explain the issue at hand.

"Sharman Networks Limited and Nikki Hemming have filed a libel lawsuit in the Supreme Court of British Columbia against Jon Newton of www.p2pnet.net," the company said. "The Writ of Summons charges that Mr. Newton has published false and injurious statements which are calculated to damage Ms. Hemming and Sharman Networks.

"The writ was delivered following two formal attempts, on May 5 and May 8, requesting Mr. Newton to remove the material in question and post an apology on www.p2pnet.net . Only after being served with the writ did Mr. Newton act to remove – if only temporarily – the defamatory material.

"The libels were so gratuitously offensive, personal and unnecessary that Miss Hemming had little choice but to respond by asserting her rights through legal action after attempts to remedy the matter without litigation failed. The libelous story and postings complained of in the writ were so significantly beyond anything relevant to any business matters in the P2P market that Sharman Networks Limited and Ms. Hemming felt they had no option but to take action.

"Sharman Networks Limited and Ms. Hemming are suing for general, special, aggravated and punitive damages."

Sorry, it's getting hard to write this story. The sound of the pigopolists laughing is unbearable.

After doing some digging, we've found that P2Pnet has removed a couple of stories that address Hemming's financial situation. If this is the so-called questionable material in the stories, however, it wasn't written by Newton at all.

Instead, he first quotes an AP story from April that covers Kazaa's recent legal battle in an Australian court.

"The chief executive of the company that owns the Kazaa file-sharing network on Friday denied hastily selling her multimillion dollar Sydney mansion and sending the proceeds to the tax haven of Vanuatu to make sure record company lawyers could not get their hands on it," the AP reported.

The story continues, "In February 2003, Hemming bought a 1.7 million Australian dollar house in Sydney, partly funded by a $810,000 unsecured loan from a company in Vanuatu with an interest rate of 3.5 percent, well below Australian rates at the time. In December 2004, with a new swimming pool she was having built still not finished, Hemming sold the house to John Myers, an accountant who worked for Sharman, for 2.1 million Australian dollars ($1.58 million) and paid back the loan to Vanuatu."

The story goes on from there.

Beyond the AP report, P2Pnet put up some musings from a couple of anonymous posters that also discussed Hemming. It seems rather obvious that these are the John and Jane Does in question from the libel lawsuit.

Newton has responded, in an interview with The Register, denying Sharman's claims.

"In my letter to Hemming's lawyer, I said, 'You and she both know you filed this suit before I received notice of her concerns. Despite your clear statement to the contrary, you provided no 'formal' notice of your client's concerns. You didn't send a registered letter or courier your demand letter, which I understand is the usual practice among competent counsel.'"

"I'm disappointed to see she's now choosing to litigate through the press, despite requiring me to keep your letters to me confidential. I've tried to address Ms Hemming's concerns respectfully and tactfully, but I now see she's not interested in keeping the matter out of the press."

Newton also added, "I've been trying to reach a settlement to protect both p2pnet and my family. I tried to achieve that by doing my best to comply with all, not merely some, of the demands made of me and, and despite my inclination to run details on my site and elsewhere, I still haven't published anything beyond the bare bones of the situation.

"I've been trying to keep this low key and between myself and Sharman Networks because I truly believe this is a 100%, solid gold, carved in rock freedom of speech issue, which is something I believe in devoutly. Yes. I'm an evangelist and Yes, I'm on a mission. Therefore want to keep p2pnet online at any cost."

It's nothing short of astonishing to see Kazaa and Hemming want to pursue legal action against a site that has spent the past few years backing P2P software makers at all costs.

In addition, one would think the company had seen enough white-wigged men to last it a long, long time. Kazaa has been the poster child for record label and music publisher lawsuits against P2P companies. The music industry - which has decried Kazaa users' abuse of its copyrighted material - no doubt finds it hilarious.

Will suing a journalist look good for a supposed freedom fighter for individual's rights? Er, probably not.

Newton has put up a plea for legal help here. ®

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