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Kazaa Appeal Likely In 2006

daria42 writes "Although the company behind Kazaa has already vowed to launch an appeal of yesterday's decision that it had breached music industry copyright, it now appears likely any such appeal will have to wait until early 2006. The music industry seems to think it'll be able to get billions of dollars in damages out of the company, Sharman Networks, although the amount has yet to be decided - and who knows if they can pay." From the article: "Sharman Networks is expected to lodge its request for leave to appeal before the deadline of three weeks from yesterday's decision expires. Sharman's lawyer, Mary Still, reiterated through a spokesperson today the company's position last night that it would 'appeal those parts of the decision where we were not successful' remained unchanged."

22 of 108 comments (clear)

  1. Likely to stir up debate... or not by sdirrim · · Score: 2, Insightful

    I think at this point it will be hard to change people's mind, so long as they know about this. It is like the last election: People will take a stance and not move, and there will be precious few neutral or swing states (or people).

    --
    Not only "land of the free" but "land of the lawyers" who love a good old 1st amendment smackdown. Shihar 153932
  2. I'm no lawyer but... by SillySnake · · Score: 5, Interesting

    But if they are going to be sued by every music company on the planet, can't they just declare bankruptcy and dodge the whole thing? I've known of companies here in the USA that do it, though on a much smaller level.

    1. Re:I'm no lawyer but... by m50d · · Score: 4, Insightful

      Yes, but whatever assets they do have will be taken by the music companies (and being who they are they *will* get them). Since that's all the companies could have got anyway they won't mind.

      --
      I am trolling
    2. Re:I'm no lawyer but... by mcrbids · · Score: 2, Insightful

      Yes, but whatever assets they do have will be taken by the music companies (and being who they are they *will* get them). Since that's all the companies could have got anyway they won't mind.

      You think the company being sued has ANY assetts at all? I think they are much smarter than that...

      My guess is that any assetts, including copyrights, customer accounts, etc. in fact do not belong to them, instead they are a "management" company with the legal responsibility to "maintain" these accounts and assetts for another party, the party of interest.

      If Kazaa loses this fight, they'll just close shop. Since they have no assetts, the RIAA can't do jack, and KaZZaa, another "management company" opens its doors at 12:00:01 AM the following day, to begin another 3 years of legal battling with the RIAA and spyware installs on Lusers' computers.

      --
      I have no problem with your religion until you decide it's reason to deprive others of the truth.
  3. legal costs within the formula by moz25 · · Score: 4, Interesting

    Well, the way it works is that the costs of legal battles and almost certain losses are factored into the business plan. In the meantime, they're making insane amounts of money with the spyware installs and they just have to stretch that for as long as possible. It's a winning strategy that doesn't require the legality of their P2P implementation to be defendable in court.

    It's rather nasty that the costs of losing in court are not always so prohibitively high that the crime doesn't pay. Look at microsoft... sorry for that comparison.

  4. How will this turn out? by laughingcoyote · · Score: 5, Interesting

    I'm not personally familiar with Australian law, I hope someone who is will be able to give us a bit of insight. But until then, I really can't understand how the judge made this ruling. Kazaa is a data transfer protocol-a crappy one, granted, but that's all it is. Their software simply -allows- users to transfer files via that protocol. Are the makers of FTP clients now liable if an FTP user downloads copyrighted material?

    --
    To fight the war on terror, stop being afraid.
    1. Re:How will this turn out? by interiot · · Score: 3, Insightful
      As far as I can tell, implementors of TCP systems, file protocols (NFS, Samba), etc. When push comes to shove, they may be able to come up with a legal definition to try to separate Kazaa from these. But most likely, this sucks, because the judge didn't realize quite the landmine he was stepping into.

      I mean, surely the inventors of the BSD TCP stack have known for a long time that piracy was occuring over the network. And it's possible to do data fingerprinting, even at the TCP level. So what stops them from being legally liable in the future?

    2. Re:How will this turn out? by shark72 · · Score: 2, Insightful

      "When push comes to shove, they may be able to come up with a legal definition to try to separate Kazaa from these."

      Huh? This was all covered in the decision. Sharman tried the "we're just a carrier" defense and were laughed at.

      "But most likely, this sucks, because the judge didn't realize quite the landmine he was stepping into."

      Reading the decision shows that they went way beyond that. I think many people who've RTFA but who haven't RTFCD are under the impression that the ruling was made after 20 minutes; the reality is that the case stretched on for many, many months, and included the testimony of computer science professors from UC Berkeley and other institutions. The common Slashdot mentality of "everybody is naive and stupid besides me" doesn't apply here. Really, guys... read the decision if you want to understand the background.

      --
      Sitting in my day care, the art is decopainted.
    3. Re:How will this turn out? by elronxenu · · Score: 2, Informative
      Read Garth Montgomery's reports from watching the case.

      Despite Garth's unusual, semi-gonzo writing style, it seems obvious to me that the Sharman defence was a pitiful joke. Nobody knows what the software does, nobody knows how it does it, nobody is responsible for it, nobody is the boss, everybody is a peon.

      Basically they didn't have a solid set of arguments to support their behaviour. They were profiting from copyright infringement, even if they did not do the copying themselves.

    4. Re:How will this turn out? by ffrinch · · Score: 2, Informative

      Check out the commentary from Kim Weatherall (expert in Australian IP law and lecturer at Melbourne University).

      The KaZaA operators were held to have authorised copyright infringement. If you don't market your FTP client as "zomg download free music here!!1" and ship it with a list of anonymous music servers, you'll probably be right.

      This is his summary from the ruling:

      i) despite the fact that the Kazaa website contains warnings against the sharing of copyright files, and an end user licence agreement under which users are made to agree not to infringe copyright, it has long been obvious that those measures are ineffective to prevent, or even substantially to curtail, copyright infringements by users. The respondents have long known that the Kazaa system is widely used for the sharing of copyright files;

      (ii) there are technical measures (keyword filtering and gold file flood filtering) that would enable the respondents to curtail - although probably not totally to prevent - the sharing of copyright files. The respondents have not taken any action to implement those measures. It would be against their financial interest to do so. It is in the respondents' financial interest to maximise, not to minimise, music file-sharing. Advertising provides the bulk of the revenue earned by the Kazaa system, which revenue is shared between Sharman Networks and Altnet.

      (iii) 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 and a webpage headed 'Join the Revolution' that criticises record companies for opposing peer-to-peer file-sharing. They also sponsored a 'Kazaa Revolution' campaign attacking the record companies. The revolutionary material does not expressly advocate the sharing of copyright files. However, to a young audience, and it seems that Kazaa users are predominantly young people, the effect of this webpage would be to encourage visitors to think it 'cool' to defy the record companies by ignoring copyright constraints.

      As for the billions and billions in damages, Weatherall notes that: "Australia does not have statutory damages (unlike the US) - the copyright owners can't argue that they should just get a fixed amount 'per infringement'." With any luck they'll get called out on their "a download is a lost sale" bull.

      Most interesting to me was that the judge ordered that the record companies provide a list of items to be filtered, because -- from memory -- they'd previously refused to provide one.

  5. Net worth of Sharman Networks by Snake98 · · Score: 4, Informative

    "The music industry seems to think it'll be able to get billions of dollars in damages out of the company, Sharman Networks"

    http://en.wikipedia.org/wiki/Nikki_Hemming

    The way I understand Sharman Network is setup, is that if Sharman Network looses kazza, it loses it's advertising base, therefore it's not worth anything. Then RIAA won't get money, but only shut down a skelton company that has no real product or base.

    --
    Freedom of Speech only include discussion that are approved by the RIAA, MPAA and DMCA.
    1. Re:Net worth of Sharman Networks by stubear · · Score: 2, Insightful

      So, I should lose my constitutional rights because of a shift in technology? Funny, technology makes it damn easy to keep track of people through spying on communications and the use of camera systems. Throw in RFID and you've got something there. Forget about your rights, technology has made them obsolete. Or was your argument meant to last only so far as you being able to get shit for free?

    2. Re:Net worth of Sharman Networks by shark72 · · Score: 2, Interesting

      " Yes. Apple sold it. Not some RIAA-sponsored site, or one put up by Sony, Vivendi or any of the rest of them. And if you think that the entertainment people are happy about that, you are sadly mistaken."

      Remember, the record companies do 99% of their business through resellers. That's largely how their business model works. The iTMS is just another reseller to them, like Amazon or Tower Records. The difference is that it's a wildly popular reseller, and they make more margin than they do in the traditional channel -- no returns, price protections, co-op ads, and the squillion other things that eat at margins in the traditional brick and mortar channels.

      "And control of distribution is the crux of the problem: no matter how many songs that iTunes sells for them it won't make any difference because iTunes isn't owned or controlled by the RIAA, and Apple Computer is not part of their group."

      That's how it's always worked. The record companies have traditionally worked in what's called a two-tier distribution mechanism: they sell the CD into distribution, who in turn sells it to a reseller. Stating that the record companies are upset because they don't own the iTMS is a bit like stating that they are unhappy because they don't own Wal-Mart, Best Buy, Amazon, Tower Records, or any of the innumerable music stores out there. It's correct, but meaningless.

      "No, they most certainly do not get it, will never get it, and would like nothing better than for the Internet to just go away."

      The record industry has survived half a dozen format changes over the past 50 years. The iTMS is huge. Meanwhile, "Open source" music labels like Magnatune, which fit many Slashdotter's model of the perfect record label, are flailing. The major labels get this Internet thing just fine.

      "And what you don't seem to understand is..."

      "You can't be that naive about this."

      Oh, please.

      --
      Sitting in my day care, the art is decopainted.
  6. The SCO business model at work by aweiland · · Score: 2, Insightful

    Since no one wants to buy our products, let's just sue!

  7. Re:Exactly, and what's the point of Appeal? by ArsonSmith · · Score: 2, Insightful

    WOW, you are a scary man. DEAL WITH IT???? I'd sure hate to be wrongly accused in your country and found guilty.

    Anyway it is to make sure that due process was followed and to help insure you are not convicted of something you did not do.

    --
    Paying taxes to buy civilization is like paying a hooker to buy love.
  8. Re:Exactly, and what's the point of Appeal? by laughingcoyote · · Score: 5, Insightful

    ...but what exactly is the point of the "appeal" process. ... Does anyone know the legal/moral/constitutional requirement for the right to apeal? Why is the appeal Judge / Jury's virdict considered any more or less valid than the original?

    The last I checked, judges and juries are comprised by human beings, known to make the occasional error, and are vested with a huge degree of power and authority. The best defense we've found so far against human error is review by many. Even newspaper articles are reviewed by an editor before publication. Should we not apply the same mechanism to judicial verdicts, that often possess the power to bankrupt or imprison someone?

    --
    To fight the war on terror, stop being afraid.
  9. Mr. Whipple is dead by Stanistani · · Score: 2, Funny

    I guess there's no question who squeezed the Sharman...

    *closes shell*

  10. In other news... by Anonymous Coward · · Score: 2, Funny

    ...Al Gore, inventor of the Internet, is being sued by yhe MPAA, RIAA, and all other **AA's of the US for "inventing" the internet which can be used to steal copyrighted material, look at kiddie porn, and buy stuff from myunclestoehair.com. God is also apparently preparing for a legal battle based on his invention of sight, which can also be used to steal visual copyrighted works.

  11. Good Riddance by bleckywelcky · · Score: 3, Insightful

    Good Riddance to a bad piece of bloatware. I'll be happy to see Kazaa die. Although I may not be happy about the implications.

  12. Want a good laugh? by serutan · · Score: 2, Interesting

    In another article on this, a record company spokesman is quoted:
    "We're disappointed they won't accept the umpire's decision. It can't be fair to build a business on somebody else's work," he said.

    I'm not a doctor and I don't play one on TV, but I know Unbelievably Blatant Hypocrisy when I hear it.

  13. Re:Exactly, and what's the point of Appeal? by J.+Random+Luser · · Score: 4, Informative

    A judge has ruled against you. DEAL WITH IT

    Go read the judgement. Plenty of links below. The judge did not rule against Sharman/Kazaa on three claims relating to Fair Trading, Trade Practices, and conspiracy. He dismissed claims against the two Technical Officers (I suspect from his wording he had some sympathy for them as they came across in court a bit dimwitted ;-).

    One outstanding item that is not being shouted from the rooftops is that Sharman and all users can carry on using Kazaa, so long as within 2 months it is cleaned up to allow only licensed copies (probably with DRM but this is not specified) to be shared. Justice Wilcox quickly got to grips with the two tiered search results Kazaa offered users, and deduced that Sharman needed a big swag of pirated stuff out there, so that the "Gold" hits, or licenced material, would increase in proportion and so boost Sharman's income. He's been jolly decent in giving them 60 days to get their house in order, but don't hold your breath.

    Of equal significance is that this case was only to establish facts. Justice Wilcox made it clear from the start he was not interested in determining losses by any party due to actions of any other party. He has in accordance with long established practice awarded 90% of the applicants' (BMG et al) legal bill for the case against Sharman. But the billions being parlayed about are for another case, where Big Music will have to establish, factually to satisfy a Judge, precisely how many dollars and cents they are down, and precisely how much of that is directly attributable to Sharman/Kazaa. That IMHO is not going to be a walkover.

    Comparisons are being made here to Grokster, but Wilkox J read Grokster and declared that he found it not relevant. The difference here is that Kazaa is a two layered structure. Sharman needed the pirates to keep the quasi-legal stuff afloat. Wilkox did not accept their plea that they did not know how much piracy was happening and could not control it. But he has accepted that Kazaa could be run as a legal (DRMed if necessary) service. And he's given them the opportunity to do that.

  14. How do they figure the amount of damages? by beyonddeath · · Score: 2, Interesting

    They're already sueing customers left and right, and now kazaa. How can they sue the users of kazaa for damages and the makers of kazaa. Isnt this kind of fighting both sides of the argument? not to mention getting paid twice for haveing a file stolen once?

    Im happily on Gentoo and using opensource software nearly exclusivly as i dont feel these business practices are ethical. Im voting with my wallet, why dont you?