Sharman Networks, the company behind Kazaa, is the latest
file-sharing software company to reach a settlement with the music
industry. Napster is now an entirely legal download site and
Grokster lost a landmark court case over its responsibilities for
file sharing and shut down.
The NMPA said that it had pursued a class action law suit
against Kazaa for infringement of the copyright of its members,
typically the authors of songs or people who had bought those
rights from authors.
It said that it had informed the US District Court that it would
not be pursuing its action because Sharman Networks had agreed to
pay an undisclosed "substantial sum" to settle the dispute.
In July Sharman said that it had settled with record labels and
agreed to block users from moving music around its network without
permission or rights holders. It paid $115 million in penalties, it
said.
The companies behind the software that operates peer-to-peer
(P2P) file-sharing networks had always argued that they were not
responsible for the activities of users. In Grokster's case, which
began in 2001 and only ended in 2005, the judge ruled that
companies were liable for that illegal use.
Grokster's “unlawful objective is unmistakable,” wrote Justice
David H Souter in September 2005, delivering the opinion of the
court in a unanimous decision. Grokster closed not long afterwards,
and though the company said that it would return with a new
service, Grokster3g, that has not happened yet.
Sharman Networks said that it would continue as a paid-for
service, though it is not yet clear whether it will charge per song
or on a subscription basis, like some rivals.
