KaZaA, the Dutch software and products company which founded KaZaA.com, is to shut down because it can't afford to defend copyright infringement charges brought against it by the entertainment industry.

In a court filing last Friday, KaZaA accused major studios and labels of engaging in "Rambo-style litigation," AP reports .

KaZaA claims it has not violated any copyright laws in developing its peer-to-peer file sharing services, KaZaA.com, which it sold in January to then Australian firm Sharman Networks Limited along with the right to license the FastTrack P2P Stack developed by KaZaA.

However KaZaA's lawyers told AP that the firm "cannot afford to defend the charges".

Even if KaZaA collapses under legal action, KaZaA.com is expected to continue running under its new management (along with the controversial Altnet piggy-back network). Sharman Networks Limited is not a party in the litigation and has recently relocated to the Pacific Island of Vanuatu.

Lawyers for the major studios and labels suing KaZaA allege that it is playing a corporate "shell game" in order to dodge liability for its actions.

A spokeswoman for Sharman Networks Limited denied the suggestion that Kazaa's two founders, Niklas Zennstrom and Janus Friis, controlled Sharman Networks Limited, which is a separate company. She confirmed that Sharman Networks Limited is not a party in the lawsuits. ®

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