Kazaa Files Counterclaim in Copyright Fight

Two weeks after a district court in Los Angeles ruled that Australian-based Sharman Networks, the parent company of file-swapping site Kazaa, could be sued in the U.S. for alleged copyright violations, the company has filed a counterclaim, contending the recoding and film industries are engaged in copyright misuse, monopolization, and deceptive acts and practices.

The suit claims the entertainment industry has “obscenely overreached” in its legal campaign to stop the downloading of copyrighted music through sites such as Kazaa.

Sharman is asking the court for a jury trial, damages, attorney fees and a permanent injunction barring the U.S. entertainment industry from enforcing copyrights against “any person or entity.”

Shortly after Sharman filed its counterclaim, the Recording Industry of America (RIAA) issued an official statement calling the suit, “laughable.”

The ruling two weeks ago is considered a major victory for the RIAA and the Motion Picture Association of America (MPAA), which have been seeking to include Kazaa in a massive copyright infringement suit brought against a number of file swapping companies, including Tennessee’s MusicCity.com, Inc. and MusicCity Networks, Inc. (which runs the popular Morpheus service), and West Indies-based Grokster, LTD.

The court ruled that Kazaa does substantial business in the U.S and since it is alleged the company engages in copyright infringement, the company is subject to U.S. law.

The music and movie empires claim the file-swapping sites are costing the industries billions, and the entertainment industry has been unrelenting in its legal and legislative assault on what it considers to be largest heist in the history of intellectual property rights. The RIAA attorneys contend that Kazaa’s peer-to-peer network is used by about 21 million users in the U.S. to share digital files.

In addition to its off-shore status, Sharman argued that Kazaa should not be held liable for copyright infringement, pointing out that PC makers aren’t responsible for the actions of destructive hackers.

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