Kazaa Ruling Due Within Weeks

A federal judge in Los Angeles has given strong hints he intends to rule
that rogue peer-to-peer network Kazaa can be sued in the U.S., a key issue
in the ongoing litigation between the music industry and the file-swapping
services.

District Court Judge Stephen Wilson heard oral arguments from both sides on
the extent of Kazaa’s contact with the United States to determine if it can
be subject to U.S. laws and is due to issue a written ruling within the next
few weeks.

Because Kazaa’s parent company, Sharman Networks, maintains headquarters in
Australia and incorporation in the island of Vanuatu, lawyers argued it
should not be subject to a lawsuit in the U.S. but, if Judge Wilson’s
statements in court provide any hints, he is leaning towards the Recording
Industry Association of America (RIAA).

“It is a difficult question, but it has to be resolved…The court will do
its best to resolve it promptly,” Judge Wilson said in open court, adding he
“would be inclined to find there’s jurisdiction against Sharman.”

If he rules that Sharman Networks has enough contact with the U.S. to be
included in the massive
lawsuit brought by the RIAA against a slew of P2P firms, including
Tenn.-based MusicCity.com, Inc. and MusicCity Networks, Inc. (which run the
popular Morpheus service) and West Indies-based Grokster. A hearing on that
lawsuit is due for next Monday.

According to wire service reports, Judge Wilson said the argument that Kazaa
provides its file-sharing services to many California residents was
“compelling,” especially when the RIAA’s attorneys pointed out that the
company’s P2P network is used by about 21 million users in the U.S. to share
digital files.

The reports quoted lawyer David Kendall, represented a consortium of movie
studios, as saying Kazaa’s easy availability is enough reason for the judge
to rule it can be sued in a U.S. court.

Sharman counsel David Casselman however argued that Kazaa should not be held
liable, pointing out that PC makers aren’t responsible for the actions of
destructive hackers.

RIIA attorney Carey Ramos urged the judge to issue a ruling that sends a
message to offshore firms hiding from U.S. laws. “This is important because
it shows that you cannot escape U.S. justice by setting up shop outside the
United States,” Ramos said, according to the reports.