"Kazaa Owner Cleared to Sue Record Labels, Movie Studios

By Jon Healey, Times Staff Writer

The company behind the Kazaa file-sharing network has the green light to pursue its own copyright infringement case against the record labels and Hollywood studios that accuse it of promoting piracy.

Sharman Networks Ltd. alleges that in their effort to catch people sharing files illegally, the labels and studios used unauthorized and unlicensed versions of Kazaa to monitor users of the network.

The company also claims that the labels breached the license agreement on Kazaa software by sending instant-message warnings and bogus files through the network.

U.S. District Judge Stephen V. Wilson in Los Angeles ruled last week that Sharman can pursue those claims.

"What's sauce for the goose is sauce for the gander," said attorney Michael Friedman, head of the entertainment practice at Jenkens & Gilchrist in New York, which is not involved in the case.

Legal experts following the case said they weren't surprised by the ruling because judges are often reluctant to dismiss claims before the parties have a chance to gather evidence. But, Friedman said, "there is a very interesting interplay" in the Sharman case "because both sides are asserting copyright infringement claims."

Evan R. Cox, a copyright law expert at Covington & Burling in San Francisco, said the ruling could be viewed as a bit of a warning to copyright holders trying to combat piracy online. But Sharman is going to have a considerably harder time actually winning the counterclaims, he said, "given how fraught with irony" they are.

Sharman, which is based in the South Pacific tax haven of Vanuatu, also accused the entertainment companies of violating antitrust laws by refusing to do business with its partner, Woodland Hills-based Altnet Inc. Rather than dismissing that claim or allowing it to go forward, Wilson suggested that it be placed on hold until the U.S. 9th Circuit Court of Appeals weighs in again on the legality of file sharing.

The labels and studios started the legal row in 2002, when they sued Sharman for distributing software that enabled people to make free, unauthorized copies of movies and songs online. It also sued the companies behind two other popular file- sharing networks, Morpheus and Grokster.

Wilson ruled in April that the Morpheus and Grokster programs were legal, prompting the entertainment companies to appeal. But he has not rendered any decisions on Sharman or the Kazaa software, which is similar to Grokster.

Sharman countersued early in 2003, only to have Wilson dismiss most of the claims in July. The company amended its antitrust, copyright-infringement and breach-of-contract claims, but the movie and music companies asked Wilson to dismiss them as legally deficient."


Read the full article
-------------------------------SNIP-------------------------------------------
Editorial comment- At the end of the article, it says :
"Wilson disagreed, but noted that Sharman may have a tough time proving its breach-of-contract claims because it made previous statements that the license."

Now, many of you that have been on the boards a while, remember I made a big deal about
the fact that apparently BayTSP, as an agent of the RIAA, appeared to have committed several direct violations of the Kazaa User Agreement, including but not limited to, that they were violating the agreement not to collect information on other users.

At the time, most people didn't seem to make much of it, but it seems now, that Sharman may be able to sue for these violations, and apparently, because agents acting on behalf of the RIAA, were using "unauthorized versions" of Kazaa (Kazaa ++ or Lite maybe?). Of course, I wasn't privy to them using "unauthorized versions", but even a casual reading of the Terms of Use of the Sharman Network/Kazaa software, would indicate to the reasonable person, that the bots of BayTSP, as well employees, were violating numerous parts of the TOS/EULA, and doing so with careless disregard of the rights of Shaman/Kazaa to control their network and their software. I feel that the case is far stronger than the comments in the article would leave the reader to believe, and the Terms of Service/EULA, is in fact a contract with users, and if the
agents of the RIAA, made a fraudulent misrepresentation in agreeing to the EULA/TOS, this would void there ability to enter and use the private network, and there are federal laws against gaining unauthorized access to networks contained stored electronic communications, and these are federal criminal statutes.
See USC TITLE 18,Part 1, Chapter 121, Sec. 2701
http://www4.law.cornell.edu/uscode/18/2701.html

~Code

But Sharman is going to have a considerably harder time actually winning the counterclaims, he said, "given how fraught with irony" they are

Fraught with irony? Kazaa has no control what it's members do any more than any messenger service does. Terms of the agreement should be binding just like any licenseed software product.
Gee I hope this pans out.

anyone have any idea how long before this goes to trial??

They're not supposed to track it, or abuse it. But that's exactly what their doing. Reread the kazaa license agreement sometime, and you'll realize that the RIAA's methods of obtaining information is illegal. Just like if a cop went into your house without a search warrant and committed and illegal seizure, it isn't admissable in court.

http://www.kazaa.com/us/terms.htm

2. What You Can't Do Under This Licence

You agree not to use the Software to:

2.1 Transmit or communicate any data that is unlawful, harmful, threatening, abusive, harassing, defamatory, vulgar, obscene, invasive of another's privacy, hateful, or racially, ethnically or otherwise objectionable;

***Violated by RIAA*** Sent Instant messages harassing users sharing mp3s, invaded a user's privacy via illegal subpoenas.

2.2 Harm minors in any way;

***Violated*** Suing a 12 year old and her single mother was definitely harmful

2.3 Impersonate any person or entity or falsely state or otherwise misrepresent your affiliation with a person or entity;

***Violated*** They aren't acknowledging what usernames are them, and are decieving other filesharers by neglecting to release such information.

2.4 Forge headers or otherwise manipulate identifiers in order to disguise the origin of any data transmitted to other users;

***Violated*** They made and distributed faulty or fake files and hash codes

2.5 Transmit, access or communicate any data that you do not have a right to transmit under any law or under contractual or fiduciary relationships (such as inside information, proprietary and confidential information learned or disclosed as part of employment relationships or under non-disclosure agreements);

2.6 Transmit, access or communicate any data that infringes any patent, trademark, trade secret, copyright or other proprietary rights of any party;

***Violated*** The Kazaa Lite/Plus software itself

2.7 Transmit or communicate any data that contains software viruses or any other computer code, files or programs designed to interrupt, destroy or limit the functionality of any computer software or hardware or telecommunications equipment;

2.8 Disrupt the normal flow of dialogue, cause a screen to "scroll" faster than other users are able to type, or otherwise act in a manner that negatively affects other users' ability to engage in real time exchanges;

2.9 Interfere with or disrupt the Software;

***Violated*** See above with Kazaa Lite/Plus

2.10 Intentionally or unintentionally violate any applicable local, state, national or international law, including securities exchange and any regulations requirements, procedures or policies in force from time to time relating to the Software;

2.11 Monitor traffic or make search requests in order to accumulate information about individual users;

***Major Violation*** This is what they're doing to get IP Addresses and user files.

2.12 "Stalk" or otherwise harass another;

***Major Violation*** Pretty much against all filesharers with mp3s

2.13 Modify, delete or damage any information contained on the personal computer of any Kazaa Media Desktop user; or

2.14 Collect or store personal data about other users

***Major Violation*** Same as above

Possible violations...

http://www.kazaa.com/us/terms.htm

3. More Do's and Don'ts

3.1 This Licence allows you to install and use the Kazaa Media Desktop on a single computer. This Licence does not permit you to install the Software on more than one computer at a time. You may make copies of the Software in machine-readable form for backup purposes only. The backup copy must include all copyright information contained on the original.
-----------
Note, it's possible that BayTSP or any other toadie on a network employed by the RIAA, downloaded on install file and used it to install on a network on several boxes...

3.2 Except as expressly permitted in this Licence, you agree not to reverse engineer, de-compile, disassemble, alter, duplicate, modify, rent, lease, loan, sublicense, make copies, create derivative works from, distribute or provide others with the Software in whole or part, transmit or communicate the application over a network.

Note-make copies....and also, transmit or communicate their software over a network is forbidden...see comment on 3.1

3.3 You may not sell, transfer or communicate the Software to any third party without our prior express written consent.

See 3.1 again

2. What You Can't Do Under This Licence

You agree not to use the Software to:

2.1 Transmit or communicate any data that is unlawful, harmful, threatening, abusive, harassing, defamatory, vulgar, obscene, invasive of another's privacy, hateful, or racially, ethnically or otherwise objectionable;

The RIAA admitted to sending out threatening IMs to users ...these may be seen as harassing, objectionable, and invasive of another's privacy.

2.3 Impersonate any person or entity or falsely state or otherwise misrepresent your affiliation with a person or entity;

Now, my understanding that "bayspiders", bots of BayTSP may have been infiltrating the networks and impersonating human users.

2.6 Transmit, access or communicate any data that infringes any patent, trademark, trade secret, copyright or other proprietary rights of any party;

When scanning users' drives, it has come out that they may have accessed other copyrighted files, other than the RIAA, and that makes this a possible violation...


2.7 Transmit or communicate any data that contains software viruses or any other computer code, files or programs designed to interrupt, destroy or limit the functionality of any computer software or hardware or telecommunications equipment;

Some have alleged that viruses or other bogus files may have been introduced into the Kazaa network by agents of the RIAA

2.10 Intentionally or unintentionally violate any applicable local, state, national or international law, including securities exchange and any regulations requirements, procedures or policies in force from time to time relating to the Software;

So, part of that would be an intentional violation of the TOS of Kazaa by the agents of the RIAA

2.11 Monitor traffic or make search requests in order to accumulate information about individual users;

LOL>..they obviously are busted on this one

2.12 "Stalk" or otherwise harass another;

Sending threatening IMs may be harassing...
Stalking laws vary, but certain actions of the RIAA agents may have violated this...

2.14 Collect or store personal data about other users.

One word on this as it relates to the RIAA.... BUSTED !
-----------------------------------------------------------------
~CW

LOL fjones987....great minds think alike~

Go Gettem" Kazaa!

Excellent points fjones987 and Code...all of this still boggles the mind! 'nuff said

B'out time someone with money go after the riaa.

Kind of wish that they would represent somone who is getting sued. That would put an end to the shenanigans that have been going on.

Maybe Senator Coleman can do more in the hearings this time rather than to have the riaa send out warning letters. Wouldn't be bad if Senator Sunu was there too.

What we really need is someone to stop the out of control copyright laws that the entertainment industry has bought and paid for. I think that copyrights should be no longer than 20 years just like patents. Imagine if patents lasted 120 years (like copyrights), you would be still paying royalties to the heirs of Thomas Edison for light bulbs, and to Bell Labs for every transistor in the computer you use right now.

Oh this is SO great! I hope they can majorly financially impact the RIAA. BIG bucks is the only thing that will cause any discomfort to them - and they have changed so many lives.

question 1 does this mean that the RIAA can't use the info they gathered against folks in court and Question 2 why haven't the news media run a story on this, they sure as hell let you know when more RIAA lawsuits have been filed?????

Because the RIAA(big 5, whatever, same group) is interconnected with the news media. The news media therefore wants us to be buying music, so they try to scare us off Kazaa(which sux btw, use BT, mIRC, or Xnews) and for some reason think we will then go into a record store to buy music.

"Rather than dismissing that claim [of antitrust] or allowing it to go forward, Wilson suggested that it be placed on hold until the U.S. 9th Circuit Court of Appeals weighs in again on the legality of file sharing."

You mean there is a question? All the lawyer types keep telling us this is cut and dried. Not so.

There is no law against file sharing and that's the problem. But not for us.

And this is the 9th circuit we are dealing with so nothing is cut and dry when dealing with them. (The 9th Circuit is the one that ruled the Pledge of Alligiance is illegal because of "Under God".)

I was at the 9th Circuit hearing (Grokster v. MGM.) Judge Wilson is a tough character and he humilated Cory Ramos. Wilson went away for six weeks and studied the computer issues and came back against the RIAA. That's where we stand---companies that dsitribute enabling software are not responsible for what users do--the EFF used the Xerox machine analogly.

The subsequent RIAA lawsuit strategy against users is just pissing in the wind. Reacting to Wilson's narrow interpretation, the RIAA has the door open to go back to Congress and specifically address P2P issues in the DMCA. Good luck! Congress is repulsed by the RIAA's sledgehammer tactics and they have no use for Democrats anyway.

The 9th Circuit Appeals Court is Feb 3 in Pasadena. I plan on being there to toast Fred/EFF with oyster shooters and little parasol drinks.

Lessig has said that the 9th Circuit is referred to as "the Hollywood Circuit"--and its true that Wilson was a Reagan appointee. But the day is long past when the Judges lay down and roll over for entertainment corporations.

A good deal of coverage is going about today regarding the 20th anniversary of the Betamax case. What you call a "bedrock decision." I believe we have the same in the Verizon and Grokster cases. It's just that the RIAA is dead and doesn't know it.

"You mean there is a question? All the lawyer types keep telling us this is cut and dried. Not so."

Heh. I caught that too. It's actually a poorly constructed sentence because it refers to the suits against the networks themselves, not the users.

i'm suprised no one caught on to this stuff earlier actually.

I'm surprised the legal counsel hasn't mentioned this yet:

remember the TOS is a contract & you can put ANYTHING you want into a contract. Even if you agree to it, that doesn't mean ALL provisions in the contract are legal or enforceable. (there's usually a clause that states if 1 portion is found unenforceable, it won't affect the applicability of the rest of the contract)

The judge will have to sort out & rule on the enforceability of the TOS violations against the RIAA. I for one want to see the RIAA get their collective nuts in a vice & get what's coming to them

death...were pointing this out in July 2003

"furrball316
Date: July 31, 2003 @ 12:56 AM
I just read the article Sherminator linked to about BayTSP and I'm scratching my head here...it says that according to Mark Ishikawa "There is no lock that can't be picked and our technology ensures that there is not a rock in the world you can hide under if you are sharing files." Now, it may be true that there's no lock that can't be picked but am I missing something here? If BayTSP picks that lock then haven't they now violated the law? And if so, doesn't that make any information they gathered as a result of that inadmissible in a court of law? And if that's not enough, for the WinMX users out there, the license agreement says "This software may be used for personal non-commercial purposes only. ANY OTHER USES OF THIS SOFTWARE ARE EXPRESSLY FORBIDDEN." The WinMX License Agreement then goes on to say "This license will terminate immediately without notice from WinMX or Frontcode Technologies if you fail to comply with any provision of this license. Upon termination you must destroy the software, archival files, related documentation and all copies thereof." I'm no lawyer, but I hardly think using spiders to spy on users activities for a profit qualifies as personal non-commercial use, and since they're violating the terms of use then they legally have no license to be using WinMX to begin with. Although I've never used Kazaa I took a moment to look up their license and I see that they have the following in theirs:
"You agree not to use the Software to:

2.11 Monitor traffic or make search requests in order to accumulate information about individual users;

2.14 Collect or store personal data about other users."

Kazaa goes on to say this about termination:
"Your rights under this Licence will terminate immediately and without prior notice if : you violate any term of this License, including violating any applicable laws or rights of any third party including the intellectual property rights of any such third party. You may be subject to legal action if you continue to use the Kazaa Media Desktop in violation of this Licence."

JohnCarlton-2 said :
"remember the TOS is a contract & you can put ANYTHING you want into a contract. Even if you agree to it, that doesn't mean ALL provisions in the contract are legal or enforceable. (there's usually a clause that states if 1 portion is found unenforceable, it won't affect the applicability of the rest of the contract)"

If you agree to a contract of adhesion....you agree to it en toto..and only the illegality of sections will make those sections illegal..or, if you signed the contract in duress, and preserved the record, such as affixing "signed in duress" on the document..inho...if mroop or leflaw has a different opinion...will defer to their opinion...

My point is that if there is a meeting of the minds, voluntarily agreed to by all parties, consideration,offer,acceptance, and the contract does not violate state or federal law, and if the parties are of legal age and competent, and you agree to it...it is legally binding in all its elements. You cannot "pick and choose" after signing a contract, which parts you will consider binding. A contract would be useless as a legal instrument...it must be enforceable.

adhesion contract, contract of adhesion - a contract that heavily restricts one party while leaving the other free (as some standard form printed contracts); implies inequality in bargaining power...

On the voidable nature of illegal contracts---
For example an "agreement" between two parties, which violates either civil or criminal law, is both illegal and void.

I like the 9th circuit. I've only heard of them do one thing(the "Under god" thing) and I have to say I agreed with them there. First of all, I'm American, and I'm proud of it, but there are two problems with the pledge of allegiance in my view.
1. pledging to a flag feels like propoganda. If you do it long enough, you might start to believe in it.
2. 'Under god' I'm atheist. If they were to get rid of just this part(which was added in during the cold war) I wouldn't complain that loudly about the pledge(but I would still complain, 16 so we do that in school.)

The above was all opinion. Please direct your comments to tasadar@cox.net because I will likely never read this article again.

That pledge assumes everyone is both a patriot and a christian-ish (jewish or some others would work I suppose, but it was designed for christian) religions. At the time it was written those were fair assumptions. But what would you replace them with? There arn't many patriots left, and religions been steadily falling for at least a century. The only thing Americans worship now is money, and you cant put that in the pledge

Sherman hasn't got a chance of winning. Not a hope. Just not going to happen. Still, good luck trying.

This is going to be as exciting as the election if it goes against the RIAA.

Can't the makers of Kazaa make something like the .htaccess file and block RIAA and their cronies off that way?

And just as with the election, evil will triumph

I understand your pessimism but this is one of those cases where they can't have it both ways. If kazaa sticks to their guns and doesn't sell out to the riaa by settling this out of court they will win. that's a big "if" but the fact is that the riaa has spent a lot of time and effort to establish their position, if they backtrack on it now they'll be laughed out of the courtroom.

all I have to say is go kazaa go great guns give them not an inch as they do you.