Kazaa and the underlying peer-to-peer technology Fast Track were founded in Amsterdam by Niklas Zennstrom and Janus Friis. Together with their company, Consumer Environment, Kazaa was introduced to the world in March 2001 (TechEncyclopedia, 2004). Kazaa quickly replaced Napster as the most popular peer-to-peer network as the latter was ordered by the U.S Supreme Court to shut down in July of the same year.
As Kazaa grew in popularity, its creators started licensing the software to other companies. Soon, Kazaa was repackaged under different names, such as Morpheus and Grokster. All of these were essentially the same application (Borland, 2005).
It was not long after that the music industy sought to shut down Kazaa, Consumer Environment was taken to court in Netherland in 2001 by Dutch music rights body, Buma/Stemra (CDRinfo, 2005). This proved to be a difficult case right from the beginning because unlike Napster, which had a centralised index of files available for download, Kazaa relied on “supernodes�? from around the world. Its clients were not dependent on a functioning mother company (Watson, 2005). Kazaa argued that they had no control over the files traded over the network. Nevertheless, in Novemeber 2001, the judge passed ruling that Kazaa was to shut down and face heavy fines if the company did not find a way to prevent users from sharing copyrighted content through its service. Kazaa chose to ignore the ruling (Menta, 2001). In January 2002, Consumer Environment decided to sell most of Kazaa assets to an offshore company, Sharman Networks, which was based in Australia and incorporated in Vanuatu (Woody, 2003).
In late March 2002, the Amsterdam Appeal Court reversed the previous judgement on Kazaa, proclaiming the peer-to-peer network legal and not liable for copyright infringement (Libbenga, 2003). The Dutch Supreme Court later re-affirms this ruling on December 19, 2003. This was the first time that a supreme court or other national high court was ruling on the legitimacy of peer-to-peer technologies such as Kazaa.
In October 2002, Sharman was sued in Los Angeles by the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA) (Woody, 2003). That lawsuit is still pending. Sharman had responded with an antitrust countersuit, claiming “the major music labels conspired to drive Sharman Network out of business in order to monopolise digital distribution,�? (Borland, 2003). The suit was dismissed in July 2003. Sharman further claimed it could not be sued in California as it lacked substantial contacts with the state; this claim was also dismissed in July 2003 (McCullagh, 2003).
In 2003, RIAA filed its first round of lawsuit against 261 individuals who had each distributed an average of more than 1,000 copyrighted songs on Kazaa and other popular peer-to-peer services such as Grokster (Borland, 2003). In most of these cases, a $3,000 average monetary damage was deemed sufficient. In September 2003, Sharman Network filed lawsuit against RIAA for copyright infringement; RIAA distributed versions of Kazaa Lite with embedded warning messages to potential infringers (Gross, 2003). But the court ruled in RIAA’s favour and dismissed Sharman’s countersuit.
In February 2004, the Australian Recording Industry Association (ARIA) took its own action and issued proceedings against Sharman in the Australian Federal court (Montgomery and Warne, 2005). And on February 6, the court gave orders for investigators to raid the offices of Sharman Networks and the homes of two company’s executives, searching for evidence linking the company to copyright infringement. The evidences were consolidated and the trial began on November 9, 2004.
On September 5, 2005, the Australian Federal court ruled that although the owners, Sharman Networks, had not itself breached copyright by sharing music but it had encouraged millions of Kazaa users throughout the world to do so (Deare, 2005). The judge gave Kazaa owners two months to modify the software with appropriate technology such as keyword filters to prevent sharing of copyrighted material (a ruling only enforceable in Australia). Sharman and its related businesses, Altnet, and Brilliant Digital Entertainment were also ordered to pay 90% of the millions of dollars in legal fees incurred by the music industry entities that sued them.
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Daniel Fisher 01:09, 9 Sep 2004 (EST)
Ruth kan 01:29, 28 Oct 2005 (EST)
