Ta Da! Kazaa Pulls a Countersuit Out of a Hat


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Some thought that Napster's demise marked the end of digital piracy; others thought that it was just the beginning. Recent events indicate that the battle against online music and film piracy is indeed in full swing, with both sides of the argument bringing lawsuits and valid arguments to the table.

In the wake of Napster and other such fallen heroes to the fans of freebies, a new leader has emerged—Kazaa. Kazaa has done a lot right: It is free, it offers a wide variety of entertainment for download, and it has strategically based itself in geographically remote locations that left it untouchable legally—or so it seemed.

The peer-to-peer company has sections all over the world; it is based in Australia, with offices in Denmark, Estonia, the Netherlands, Sweden, the West Indies, and Vanuatu (an island that was allegedly chosen for tax purposes, though Hollywood claims was selected more for its inclination towards secrecy). Matt Oppenheim of the Recording Industry Association of America (RIAA) has been quoted as saying, "You don't see GE setting up there for tax purposes. The only reason people go to Vanuatu is to avoid the reach of the court."

In January, U.S. District Judge Stephen V. Wilson of Los Angeles dismissed a claim by Kazaa's owner's, Sharman Networks Ltd., that it could not be sued in the United States. He said that because there are a substantial number of users in California, they could be subject to United States law.

Some music groups have been adamantly against music being available for free downloading—most famously Metallica. Other musicians, particularly lower profile ones, however, have been more open to using such technology to expand their fan base. One such group is Two Guys Trio whose lead singer, Evan Gamble, has said, "Whether licensed or unlicensed, it's a fan. We want people to hear the music," he goes on to say, "so they'll buy the album, so they will come to the show and request songs on the radio."

The problem, of course, it not whether musicians are okay with unlicensed music downloads, but whether it is legal or not. The RIAA and others have been vehement in their assertion that it is not and to date they have been largely uncontested legally. Companies such as Napster have put up a strong fight, but have not had the resources to sustain a defense for long periods of time.

Kazaa has taken an unusual route by countersuing the entertainment industry for copyright misuse, monopolizing content, and deceptive acts and practices. According to Sharman, "In seeking to simultaneously stop illegal copying and to maintain their dominant position in the distribution of musical and movie content, the industry plaintiffs have obscenely overreached." It also claims that the entertainment industry is behind the times and fails to realize that today's consumers no longer need to purchase physical copies of music or films.

Sharman seeks a trial by jury, damages, attorney fees, and an injunction against the entertainment industry prohibiting future enforcement of United States copyrights. In response, the RIAA has called Sharman's claims laughable.

This is one of the largest cases of online copyright infringement and serves to test the reach of the United States judicial system. It seems that Kazaa's future will depend on whether it can prove both the issue of monopolizing content and whether Kazaa can be used legally. Sharman and Kazaa can expect to fight battles similar to those that were fought over VCRs and photocopy machines when they first came to market. If Kazaa wins its fight, it will set precedents the world over for online film and music distribution; if it loses, the RIAA should gear up for a fight against whatever company arises to take the place of Kazaa.