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Client Update: Record industry settlement with Kazaa

28 July 2006

The much-publicised copyright infringement litigation brought by the major record companies in the Federal Court of Australia in Sydney has been settled, it was announced today. Sharman Networks Ltd, the company behind the Kazaa peer-to-peer file-sharing system, has agreed to pay US$115 million in compensation to various music companies and movie studios around the world.

As discussed in AAR's Focus: Copyright – September 2005, the Federal Court of Australia last year found that the operators of Kazaa had authorised copyright infringement. The litigation continued in Australia and the United States, with the music industry seeking substantial damages. Yesterday's landmark settlement in Sydney will bring an end to these proceedings.

Sharman Networks has also agreed to legalise Kazaa by implementing filtering technologies to prevent illegal activity and by entering into licensing arrangements with the record companies. The settlement is considered a major victory in the continual battle of the global music industry to prevent piracy.

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