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Historic Kazaa settlement
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Historic Kazaa settlement

THE RECORDING industry has arrived at a historic settlement with the operators of the Kazaa file-sharing system. Gilbert & Tobin acted for the recording industry, comprising 30 clients…

THE RECORDING industry has arrived at a historic settlement with the operators of the Kazaa file-sharing system. Gilbert & Tobin acted for the recording industry, comprising 30 clients scattered across the globe.

The case was launched in 2004, with the largest set of Anton Piller orders ever made in Australia and simultaneous raids on 12 locations in three Australian states.

As a result of the agreement, Kazaa would pay US$115 million (AUD$152 million) compensation for past infringements, and convert to a legal downloading business offering licensed music.

The largest copyright case ever brought before Australian courts, and among the largest IP cases in the world, the settlement with Kazaa is expected to have far-reaching implications for the recording industry, artists and consumers, said Gilbert & Tobin.

The firm’s team — which consisted of up to 60 staff at the time of the Anton Piller orders — was led by IP partners Michael Williams and Siabon Seet.

The process was long and complex, involving 30 record company clients in different countries, said Williams. Yet the Australian decision was achieved relatively quickly, finishing ahead of the litigation in the US.

“The settlement marks the end of a period of uncertainty about peer to peer liability,” said Williams. “The question is often asked, how would we deal with other peer to peer operators. The answer is that having reached this settlement, I expect further litigation against other peer to peer operators that haven’t yet gone legal.”

In the week since the announcement of the agreement, the US recording industry has already begun legal action against the large file-sharing service, Limewire. BitTorrent, another filesharing system, is understood to be in discussions with some rights owners with a view to launching a licensed service, Williams said.

“The Australian Kazaa case was regarded as adventurous when we launched it against what was a worldwide system. Australia didn’t account for the majority of Kazaa user activity but was the country in which the operators were based. But it has now become much more orthodox that peer to peer operators like Kazaa face serious legal risks if they leave infringement unchecked on their systems,” said Williams.

Gilbert & Tobin worked in close cooperation with a team at US law firm Jenner & Block LLP, led by partner Steve Fabrizio. Mary Still at Clayton Utz led the Australian legal team representing Kazaa.

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