The Kazaa Raids: The tension between the Music Industry and Kazaa reaches fever pitch

It reads like an action thriller… One moment you’re at work conducting your business as usual, the next moment the doors are being pushed in with court orders being waved in front of your face to search the entire premises and business records. You leave the building to go home to be confronted with more court orders to search your home and are told to wait outside on the kerb. If you think this scenario sounds like the start of a action thriller movie, it gets more exciting when you find out that the court orders are part of a simultaneous “raid” on your business, you, your business partners and their personal homes, four of the largest ISP’s and a handful of universities. You start to think you are in fact a plot line for the over the top “Alias” TV series or the beginning of another “24”. But this all actually happened here in Australia, not the US.

I am talking about the Anton Pillar orders that were executed on the peer-to-peer companies Sharman Networks, Kazaa and their business partners by the Australian Record Industry Association (ARIA), in its capacity as representing its members interest. ARIA’s members are record companies, and the action is brought in the name of each record company joined to the proceedings.

An Anton Pillar order is an order made by the court to search and seize in a civil action and is used by a would be plaintiff as a precursor to instituting proceedings. Anton Pillar applications are not public applications, as the purpose is to conceal from the other side the intention to seize property in order to avoid any property being destroyed by that party.

To obtain an Anton Pillar order an applicant must satisfy a very high threshold to convince a judge to exercise his/ her discretion to issue one. The judge must be satisfied that there is a prima facie case to answer AND that there is a reasonable and probable cause to believe that evidence would be destroyed before evidence could be garnered for an infringement action. That is, for example, at the push of a button the web site could be gone. If the infringement action is unsuccessful, the plaintiff may have to pay large penalties for pursuing an Anton Pillar order.

The applicant for the Order must disclose to the court all material information, even if the information is not favourable to the applicant’s case. The reason for this is that, unlike other court applications, the party against whom the orders are to be carried out does not have an opportunity to defend itself or present information which would prevent an Anton Pillar order being granted.

At the most basic level, Sharman Networks and Kazaa operate a peer-to-peer network where internet users can swap digital files, including music and film files, allegedly illegitimately and in breach of copyright laws. ARIA used the Anton Pillar orders to capture a digital snap shot of how the Kazaa technological environment works at any given moment. ARIA believed that if it pursued the usual evidentiary process (known as discovery), important evidence could be destroyed or removed by Kazaa before ARIA had the chance to analyse it. The orders were for specific information held by Kazaa, meaning that ARIA was not permitted to seek information outside of the limited ambit of the orders.

ARIA, in its application for the Anton Pillar orders, argued that there is a distinction between “static” records showing the structure of a file-sharing system and “dynamic” records showing the system in operation. ARIA argued that it was the “dynamic” records which display information as to Kazaa’s control over how its users use the system. Bt taking a ‘snapshot’ ARIA argued that it would be able capture information as to Kazaa’s ability to differentiate between legitimate and infringing copies of copyright works.

Kazaa appealed the orders claiming that the court had not been provided with a disclosure of all the material facts. If their appeal was successful, any information gathered during the raids could not be used in proceedings. Kazaa reasoned that in current litigation in the US involving companies related to Kazaa, Kazaa had cooperated fully and there was no evidence that they would withhold information or destroy evidence. Kazaa argued that ARIA did not provide sufficient information to the court by failing to inquire as to Kazaa’s willingness to cooperate and, in failing to do so, ARIA had failed in its duty to present all the material facts.

In reply, ARIA were successful in convincing the court that the information obtained from the raid was different in nature (that is, dynamic and not static) from that obtained in the US trial and, therefore, reference to the US case was not a material fact. It was the transitory and ephemeral nature of the information sought by the Anton Pillar order, the need to take a ‘snap-shot’ of the Kazaa system in operation. This type of evidence, ARIA argued, could only be obtained by such an order as although the information may not necessarily be intentionally destroyed, it would be destroyed by the nature of the system.

ARIA’s argument was successful and Kazaa’s application to set aside the orders was dismissed by the court. So this story ends for now. Although, like any good episode of Alias or an hour of 24, and considering the high profile media frenzy, the scaremongering in both the US and in Australia of record companies suing individuals sitting at home on their computers downloading songs, the saga will continue. The next episode will be more explosive than ever with the parties expected to be back in court 1 July.

Naomi Messenger is a lawyer with Middletons Lawyers and is seconded part-time to Arts Law.

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