RIAA defendant targets Kazaa in new lawsuit

12/7/2006 3:40:27 PM

by Eric Bangeman

File-sharing litigation took an unexpected twist yesterday with the filing of a lawsuit against Sharman Networks, creators of the P2P file-sharing application Kazaa. The plaintiff, Catherine Lewan, was herself a defendant in one of the many file-sharing lawsuits brought by the RIAA. She was sued by Sony BMG in April 2006 and ended up paying a settlement to resolve the litigation.

Lewan seeks class-action status for the lawsuit, which accuses Sharman Networks of deceptive marketing and installing additional spyware on users' computers for "nefarious purposes." Lewan also alleges negligence, consumer fraud, and deceptive trade practices in her complaint.

The lawsuit says Kazaa led Lewan and countless other defendants straight down the unwholesome road of copyright infringement by "deceptively" marketing its use as legal. Lewan accuses Sharman Networks of marketing the application in this manner despite knowing that most users would use it to "catalog and store" music and video files and that once the catalog was created, the application would deposit them in a "share folder" and make them available for download by other users of the network.

According to Lewan, all this sharing was done without the user's consent in order to build traffic on the Kazaa network and increase the company's advertising revenues.

In July, Sharman Networks agreed to a global settlement covering all litigation filed against it by the MPAA, RIAA, and the International Federation of the Phonographic Industry. The $115 million-plus settlement is the latest triumph for the recording and movie industries in their attempts to be compensated by the creators of P2P networks and applications for acts of copyright infringement carried out by their users.

The 2005 MGM v. Grokster ruling made such settlements inevitable. That Supreme Court ruling held that "one who distributes a device with the object of promoting its use to infringe copyright" is liable for the resulting acts of infringement by users of the device. Sharman Networks' settlement may also have the effect of "immunizing" those found to have infringed on the music industry's copyrights from having to pay monetary settlements. RIAA defendant David Greubel argues that the settlement means that RIAA has been "fully satisfied for any liability and damages" due to his alleged conduct; that argument has since been echoed by other defendants.

An RIAA spokesperson told Ars, "This kind of action was bound to happen. We're just surprised it hasn't happened sooner and hasn't happened to a company like Limewire, which is engaged in this activity today."

Attorney Ray Beckerman, who maintains Recording Industry vs The People, told Ars Technica that he would not be surprised to see Sharman Networks increasingly dragged into the RIAA's file sharing lawsuits, with defendants filing "third-party practices" against the creators of Kazaa in response to file sharing lawsuits.