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Sharman Networks - the operator of Kazaa.com - has backed out of an unusual lawsuit against a pro P2P technology site, although its CEO is still banging on with her case.

P2Pnet.net owner Jon Newton today posted a court document revealing that Sharman Networks has "discontinued" it actions against Newton, his ISP Interserver and four people who posted comments anonymously to the the P2Pnet site. Sharman CEO Nikki Hemming has also dropped her actions against three of the anonymous posters but upheld her complaint against Newton, his ISP and one of the anonymous posters. An updated version of Hemming's libel lawsuit points to an allegedly defamatory article posted by Newton that contains additional comments from the anonymous poster.

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.

Hemming's updated lawsuit criticizes Newton's decision to quote from the AP report, although reproducing material discussed in a courtroom is typically considered fair game, as we explain here. The lawsuit also points to parts of the anonymous comments that describe Hemming as a "dupe" and a "disgrace" - among other things.

"The Defendants Newton, Interserver, and Richard Roe and each of them published, or caused to be published, and/or continued to publish, the defamatory expression . . . with knowledge of its falsity or alternatively, with reckless indifference whether it was true or false," Hemming's lawsuite states. "Further, or in the alternative, the said Defendant Richard Roe maliciously published his aforesaid defamatory publications for an improper purpose, and/or with the predominant purpose of causing injury to the Plaintiff."

Hemming's lawsuit also takes issue with Newton making this whole affair public. Hemming's lawyers go so far as to suggest that the publicity generated by the lawsuit and subsequent P2Pnet web site hits will counter Newton's legal costs resulting in "a net profit and ensuring the permanent success of [Newton's] P2P Website."

[Cough - Ed.]

Newton has long presented the matter in a much different light. He maintains that a major freedom of speech issue is at hand, since Hemming is suing over his coverage of a public AP report and comments posted to his web site. One could argue that a loss for Newton in this matter would have chilling effects on the way people use the internet in Canada.

"This will will sound trite, but this case really is bigger than me and P2Pnet," Newton told us. "That is what has to be emphasized and understood. I really want to see this go to court even though I am scared shitless because these questions have to be answered. If we win, it will make a huge difference to getting these laws revised, and they have to be revised.

"I haven't got a huge income and am not rich, so I need all the help I can get in this."

Along that latter line, choice Toronto venue The Rivoli will be holding a benefit for Newton on August 5. Artist/activist Neil Leyton is setting up the lineup for the show.

Newton also has his hat out here.

We continue to find it odd that Hemming would want to pursue this lawsuit given Kazaa's extensive past legal battles. Why not focus on getting Kazaa in order rather than going after a pro P2P technology site of all things?

Public figures receive all types of criticism on the web, ranging from the spot on to the insane. If folks start filing lawsuits over every mean thing said about them on a message board, our courts will grind to a halt at a frightening speed.

Beyond all that, Hemming continues to maintain that Newton refuses to out the anonymous poster who allegedly sullied her good name. And yet you'll find a chap here outing himself as the poster.

So what's this really all about then? ®

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