By Sandra Marquez
Associated Press Writer Tuesday, November 26, 2002; 3:07 AM
LOS ANGELES –– A federal judge has signaled his support for a bid by record companies and movie studios to sue the parent company of Kazaa, a popular online file-swapping service.
U.S. District Judge Stephen Wilson heard arguments Monday on whether Sharman Networks Ltd., which is headquartered in Australia and incorporated in the Pacific Island nation of Vanuatu, is subject to U.S. copyright laws.
"It is a difficult question, but it has to be resolved," Wilson said. "The court will do its best to resolve it promptly."
Although Wilson did not indicate when he plans to issue a ruling, he appeared to tip his hand, noting that he "would be inclined to find there's jurisdiction against Sharman."
"I find the argument about providing the service to so many California residents compelling," Wilson said, referring to the plaintiffs' claims that Kazaa provides free access to copyrighted music and films to some 21 million users in the United States. The company has advertising revenue of about $4 million.
The Sharman case is one of the largest in the recent copyright wars testing the international reach of U.S. courts. If Wilson decides Sharman can be sued, the company would be thrust into the same legal predicament that has stymied popular swapping services such as Napster and Aimster.
David Casselman, an attorney representing Sharman, said holding the online swapping company liable for copyright violations would be akin to prosecuting a computer manufacturer for the actions of computer hackers.
David Kendall, an attorney representing six movie studios, including Disney, Fox and Paramount, said the fact that Sharman's product is available in this country is sufficient cause to face trial in a U.S. court.
"It does not violate due process to have them stand here to answer for their conduct," Kendall said.
Sharman attorney Rod Dorman countered that such a move could open a door for a judge in "communist China" to rule against U.S. companies that operate online. The judge did not appeared swayed by the argument.
"I'll take my chances with that judge in communist China," Wilson quipped.
Carey Ramos, an attorney representing song writers and music publishers, said the judge's comments would send a message to those companies seeking to operate offshore.
"This is important because it shows that you cannot escape U.S. justice by setting up shop outside the United States," Ramos said.
