Kazaa Outed Over 'Trust Fund' for Red Cross

danwarne writes "In one of the most bizarre twists in the court action against Kazaa yet, documents have been tendered in Australian Federal Court court that showed that Kazaa claimed to have set up a trust fund for donations to the Red Cross (at about the time the tsunami hit), but the Red Cross has confirmed in writing it has never heard from them about it. The music industry alleged in court that it was a tactic by Kazaa parent company Sharman Networks to park money out of the reach of the music industry if it loses the case and is left with a huge damages bill. This in the same week that it came out in court that top Sharman/BDE execs offloaded their multi-million dollar homes. Sounds like Kazaa's lawyers might be telling them to prepare for the worst..."

Comments

Hurray!

[sgant]

The RIAA is about to shut down another service that no one uses anymore! Way to go!

Glad to see them wasting their money by pissing it away like this. The people that download music/movies will always be about 10 steps ahead of them.

Re:Hurray!

[Anonymous Coward]

Kazaa earns their money from advertisements (both the ads within the program, and the spyware/adware that comes bundled with it). Apparently their earnings are substantial enough to pay their server costs and any development costs (not that Kazaa bothered developing any new technologies that didn't hurt the user in some new way).

I agree though, it seems unlikely that Kazaa will actually be able to pay all the money the RIAA will squeeze out of them. None of the people they sew manage to pay either, they just pay a large fine which is agreed to out of court and (if neccessary) declare bankruptcy afterwards. I really don't think a group of greedy criminals (Kazaa) is going to pony up any more money than they absolutely have to.

Re:Hurray!

[MosesJones]

The people that download music/movies will always be about 10 steps ahead of them.

Quick summary of what you said

"Run run as fast as you can, you can't catch me I'm the gingerbread man"

I'm assuming in this downloading that you are making direct contributions to the artists that made the films/music rather than just ripping it off ? Didn't think so.

In my book that makes you an equal git with the RIAA. They might be over-zealous, but you are a plain and simple thief.

Re:Hurray!

[Peaceful_Patriot]

Just because the music industry has changed the copyright rules to their advantage, doesn't mean downloaders are thieves. Unless I am copying the material and selling it for a profit, or claiming I am the artist, they have no leg to stand on!

People have been sharing music for as long as I remember. In the 60's My sister used a reel to reel to tape songs off the radio and make copies for her friends. I had a casetter recorder/player with two tape drives in the 70s which was specifically for copying tapes. The 80's brought us VCRs which were ruled as legal despite the attempt of the movie insustry to outlaw them. The 90s brought us file sharing and the RIAA.

You might buy the line that unless you pay for the music you are a pirate, but I remember the history, and I'm not doing anything that hasn't been done for the last 40 years and I don't feel guilty about it.

Journalism

[kureido]

The Red Cross wouldn't lie. Certainly my-main-man at the Cross, Jean-Jacques, was nothing but totally upfront during our interview. And I've interviewed plenty of spivs. My spivometre didn't move a nanometre while I was talking to him. Jean-Jacques was a straight up bro.

What in the holy name of hell is passing for journalism these days? I might as well be reading my little brother's blog.

Re:Journalism

[shark72]

"Most downloaded program in the world? Rebuild Asia singe-handedly? This isn't hyperbole, this pure Improbability-Drive-A-Bole! The editor only needed to read three short paragraphs in to reach this rubbish! So either no-one read the article, or else they didn't understand what they were reading."

Many journalists and correspondents write in a colloquial style; it's part of their appeal. Google on "Hunter S. Thompson" or "Ann Coulter" or "Dominick Dunne" to see some more examples.

To your credit (and to the credit of others who are boggled by the correspondent's writing style), I understand that many Slashdotters are of the New Media generation, and simply did not grow up in the day when print medium was king and many correspondents had a trademark style.

Perhaps an appreciation of Dispatch's style is better suited toward non-Slashdot types. Many Slashdotters are coders; a 0 is a 0 and a 1 is a 1 and there's just no room for flexibility. The rest of us know that Dispatch isn't being literal when he says that the Red Cross could have "rebuilt Asia" with Sharman's riches, and we don't mind at all. But I can certainly understand that those who live in the land of ones and zeros would be upset by his rhetorical style.

p2p not synonymous w/ kazaa

[dirvish]

Those wankers at Kazaa have hurt the p2p cause quite a bit. They knew they were doing shady stuff (adware, etc.) and now they are rightfully paying the price. For every step that people like the EFF make to make government realize it shouldn't over-regulate technology, shysters like Kazaa force things a step back to make a quick buck.

Priorities

[prdallan]

Don't know about the law in Autralia or even in the US, but in certain countries actions similar to some of the described above could have as consequence people doing some time in jail...

At least here where I am, before performing this kind of actions better one should really better consult with criminal lawyers and be very carefull with it; One should be more worried with the penal consequences than with financial assets....

Privatized Court of Public Opinion

[Doc Ruby]

We know that none of these sleazy biz tactics have anything to do with their liability for abuse of their software by some users. I bet these stories are being promoted by the music biz to cover up a Supreme Court decision against Kazaa/Grokster/Morpheus this month, which won't have a legal basis, but is rather just a favor to corporate media which hates P2P. The rest of the corporate media, in the "news" business, will be able to report that the Supremes dealt the "sleazy" P2P corps the justice they deserve, because they run tsunami scams. It will all make sense in the "news", though it won't have any legal merit.

Re:Privatized Court of Public Opinion

[Doc Ruby]

It doesn't matter how sleazy they are, when deciding their liability for the actions of users, as being argued in the Supreme Court this month. Even the basest criminals have the rights to exercise their legitimate actions free from liability. It doesn't matter how righteous they are, what their business model is, whether they eat babies in their office - when judging their right to distribute software that is sometimes abused by some of its users. Unless you're so distracted by their other reported abuses, that you've totally ignored that I'm talking about their Supreme Court case deciding only that software liability, you're demonstrating exactly what I'm talking about.

"Fraudulent conveyance"

[Beryllium Sphere(tm)]

Normally it's legal to sell your house to your brother for ten dollars. However if you do it to get your property out of the reach of your creditors then Bad Things will happen to you.

At least that's the way it works in US law.

The music industry is making grave accusations here.

Re:"Fraudulent conveyance"

[shark72]

"Okay, this is getting off-topic (and I kind of expect to be modded down as such), but how exactly are they supposed to know exactly _why_ you did it? How could they even begin to prove it, even if it _were_ true?"

There is a term you may have heard on TV shows or movies: "circumstantial evidence." It's a fact that can be inferred from other facts. It's generally admissible in courts.

For example, if an executive of a company whose business model was based on piracy, and whose said company was headquartered in Vanaatu, and whose headquarters were raided, suddenly sold his multi-million dollar mansion to his brother for $10, the courts would not need to see a signed note stating "I am selling you my house for $10 so the courts don't get it if I lose this case" in order to figure out what's going on. Courts are usually pretty good about identifying ducks if they walk, act and quack like such, and less tolerant of "bad actors" than many people might think.

Re:Not suprised...

[Doc Ruby]

Actually, it's more like in the 1980s, when a very high percentage of pager users were drug dealers; a very high percentage of pages were illegal drug transactions. Were the telcos liable for filtering those pages?

Not so

[Nik13]

You make it sound like they're only attacking networks/means that nobody uses anymore, but they've done quite a lot of damage to BitTorrent and eDonkey/eMule "communities" too. I wouldn't exactly say that nobody uses those anymore. Granted, they haven't shut down those 2 yet, but it's not like they aren't trying or not doing anything about them either. (Mind you I'm quite happy to see this crapzaa plague go away)

Re:Not so

[sgant]

They won't shut down BitTorrent. They can't shut something down unless it's a central entity.

I mean, they could try to go after the original programmer of Bittorrent or something, though the source out in the world protected by the MIT licence...so the RIAA would also have to challenge that if they want to "shut it down".

They close a tracker site down, 10 more pop up. Bittorrent isn't going anywhere and in fact will become better and better.

The RIAA are fighting a losing battle...do they have a right to fight it, sure. But I still belive they should instead try to find a better solution then what they're attempting, because as you can see, it doesn't really stop anyone from trading music. They shut down Napster, people still trade, they shut down Kaaza people still trade. In fact, I'm willing to bet that more people trade music today then they EVER did when Napster was around. I have no facts to back that up, it's just a hunch.

Of course, I could be totally wrong.

Re:Not so

[m50d]

They weren't open source is why they went under. Gnutella is still out there and going strong while other networks from the same era are collapsing, because the source is available. Napster and Kazaa both got in trouble when they started filtering things, because that showed they could have filtered out copyright infringing stuff. That can't happen with bittorrent, because the software is open source and there is no central server.

Re:Not so

[bayvult]

They can't shut something down unless it's a central entity. ... Of course, I could be totally wrong

You are totally wrong. BitTorrent was never designed to be anonymous. BitTorrent sites were closed down quicker than the P2P networks because the individuals sharing thier files identified their IP addresses and Torrents were advertized on easy to find websites. Very easy to go after a web site.

It's weird how people see the word "decentralized" and think it's some kind of magic.

Re:I see what you mean!

[Anonymous Coward]

Yeah, I see what you mean there brother! Now all the pieces fall together: Sharman Networks is behind the Christmas Tsunami disaster! The bastards!

Or rather: The RIAA/MPAA goons invented/distorted the story in order to create a public outcry against Sharman networks ("the heartless bastards! they profited from the catastrophe for their own selfish goals"), but screwed up with the timing.

Re:Not suprised...

[mark-t]

The reason why there were no penalties for it before is that until fairly recently, the potential for noncommercial copyright infringement to actually make an impact in the total number of copies out there was virtually nonexistant, and simply not worth the time to pursue. Outside of a few fringe warez BBS's, the most common form of piracy was via sneakernet, where people would physically exchange disks. Ever-improving internetworking technology in the hands of the consumer, however, has made very large scale copy distribution increasingly available to them at virtually no cost at all, presenting an ever-growing threat to what Copyright actually is supposed to be. Copyright holders, and the agents that represent them, are compelled to act (ie, press charges) against infringers in response to the technological changes in order to preserve the value of Copyright.

Unfortunately, a return to the state Copyright was in before 1996 would also necessitate a return to a time where the Internet wasn't what it is now either. Since the latter isn't possible, neither is the former.

Sorry.

Re:Not suprised...

[Anonymous Coward]

They took software for trading files and turned it and it's abilities into a profit machine

There's nothing inherently wrong with that.

After they had cashflow they had one of two responsiblities: Either filter owned works or pay up for those works.

They have no such responsibility, any more than Microsoft has a responsibility to build filters into IIS to stop people from putting copyrighted works on websites without permission.

I don't know how people can be suprised or offended when Kazaa or Napster gets sued.

Because this software is just another way of copying files. You don't see the Apache Foundation get sued, or Microsoft for Windows file sharing, or AT&T for writing 'cp'.

"Thief"?

[AtariAmarok]

"In my book that makes you an equal git with the RIAA. They might be over-zealous, but you are a plain and simple thief."

How can he be a thief when no theft is involved at all? Copyright infringement does not meet the definition of theft, and pointing out such facts as the distinctions between entirely different crimes is not an attempt to justify copyright infringement or say it is OK.

Easy Solution

[kd5ujz]

If they claim it was a trust fund for the Red Cross, then there is an easy solution, give ALL of the money to the Red Cross.

Re:Not suprised...

[Anonymous Coward]

I won't argue whether or not these people are scum, but...

After they had cashflow they had one of two responsiblities: Either filter owned works or pay up for those works.

I just can't accept that. I'm skeptical that toolmakers are responsible for how their tools are used, and it's virtually impossible for them to control whether the tool will be used for good or evil. If this profit-making company has to add compulsory filtering to Kazaa, then Microsoft has to add compulsory filtering to IE and Outlook. What you are suggesting, would be a tremendous (impractical to the point of impossibility) burden on toolmakers.

And while the anecdotal evidence is that this tool is mostly used for evil, I haven't heard of any technical aspect of how the tool works, that suggest that it is intended for that. Indeed, I just can't think of anything a warez distribution tool would do, that a samizdat distribution tool wouldn't also do.