Out-Law News 1 min. read
28 Jan 2003, 12:00 am
The Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA) previously sued KaZaA BV, a Netherlands-based company that originally created the popular file-swapping software, together with the other two major file-swapping companies, StreamCast (owner of Morpheus), and Grokster, over copyright infringement.
When the KaZaA software was sold to Sharman Networks, a company based on a small Pacific island, the entertainment industry decided to expand the ongoing suit against Grokster and Morpheus, to include KaZaA's new owner.
Sharman claimed it could not be sued in California, because it is headquartered in Australia and has, according to the company, no substantial business contacts with the US. Earlier this month, however, the Los Angeles court decided that the lawsuit can proceed.
In retaliation, Sharman yesterday filed a lawsuit in the same court, reportedly alleging that the major entertainment companies have colluded against on-line rivals to stop competition, in violation of US antitrust laws.
Sharman also claims that the industry should not be allowed to defend its copyrights in US courts, unless the allegedly anti-competitive practices are corrected.
The company further alleges that in 2002 it met with movie and music industry executives seeking to license copy-protected digital content for on-line distribution.
According to Sharman, those executives who expressed interest were "repeatedly instructed" by the RIAA and the MPAA not to do business with the company, CNET News.com reports.
Together with the antitrust allegations, Sharman claims that the KaZaA software has "considerable" non-infringing uses and is therefore not illegal, and that the company is fundamentally different from file-swapping services such as Napster.