No more free shares in Australia, as court ruled on Monday that users of Kazaa, a popular internet music file-swapping system, breached music copyright and ordered its owners to modify the software.
"The respondents authorised users to infringe the applicants' copyright in their sound recordings," Federal Court Judge Murray Wilcox said in his ruling.
Australia's major record companies sued Kazaa's Australian owners and developers, Sharman Networks, claiming Kazaa had cost them millions of dollars in lost sales.
The music industry told the court that Sharman Network licensed users to access a network it knew was being used for piracy and hence it was authorising people to infringe copyright, reports Reuters.
According to Business Week, Michael Speck, managing director of Australia's Music Industry Piracy Investigations said, "This is a long-awaited judgment on an issue that's critical to the music industry, artists and consumers worldwide."
The 10 defendants in the Australian case include Kazaa's owners, Sharman Networks Ltd., Sharman License Holdings and Sharman's Sydney-based chief executive officer, Nikki Hemming.
Their lawyers argued that the software used by Kazaa is no different from a tape recorder or photocopier and that Kazaa could not control copyright infringement by users of the network.
The case is the latest in a long line of courtroom showdowns between so-called peer-to-peer (P2P) networks and copyright holders like record companies.
In a landmark case earlier this year, the U.S. Supreme Court said Grokster Ltd. and Streamcast Networks Inc. developers of leading Internet file-sharing software can be sued because they deliberately encouraged customers to download copyrighted files illegally so the companies could build a larger audience and sell more advertising.