The antitrust argument was made by Sharman in a counterclaim
against a lawsuit filed against it by the entertainment companies
for copyright infringement.
The thrust of Sharman's argument was that the other companies in
the lawsuit between them control, by its estimate, 85% of the
market for manufacturing, labelling and distributing copyrighted
music and films. It said that they acted as a monopoly and in
restraint of trade by refusing to licence any of these works to
Altnet, a company with which Sharman has entered into a
partnership.
Altnet's business is described by Sharman as licensing
copyrighted works for fee-based distribution to KaZaA users. When
KaZaA users perform a search for files, the Altnet files matching
the search query will appear above the free results – i.e. the
legitimate, paid-for content will appear above the infringing
content. After seven months of operation, KaZaA says Altnet is
issuing nearly 15 million licensed files per month.
Sharman receives a fee from Altnet for generating sales, but its
success is being throttled by companies like MGM and Warner Bros
refusing to licence their works to Altnet.
The problem for US District Judge Stephen Wilson was that it had
no title to bring an antitrust case. "Sharman is neither a
competitor nor customer in the relevant market," wrote Judge
Wilson. "Rather, Sharman's sole stake in that market arises
derivatively from its contractual relationship with Altnet".
Sharman's business is the distribution of file-sharing software,
not entertainment. Therefore, concluded Judge Wilson, "Sharman does
not have standing."
Sharman's claim is here
The judgment, dismissing its claim, is
here
