Universal Music Australia Pty Ltd v Sharman License Holdings Ltd

In the case of Universal Music Australia Pty Ltd v Sharman License Holdings Ltd, the plaintiffs, which included Universal Music Australia Pty Ltd, the Australian Consumers’ Association Pty Ltd, Electronic Frontiers Australia Inc, and the New South Wales Council for Civil Liberties Inc, sought to hold various defendants accountable for copyright infringement through their involvement with the Kazaa file-sharing system. The defendants included Sharman License Holdings Ltd, Sharman Networks Ltd, LEF Interactive Pty Ltd, Nicola Anne Hemming, Altnet Inc, Brilliant Digital Entertainment Inc, and Kevin Glen Bermeister. The central dispute centred on whether these defendants had authorised the infringement of the plaintiffs' copyrighted sound recordings by users of the Kazaa system.

The court had to determine whether the defendants had authorised the infringement of copyright by Kazaa users, and if certain conduct by the defendants amounted to misleading or deceptive conduct under the Trade Practices Act. The plaintiffs argued that the defendants had authorised the infringement of their copyright through the Kazaa system, and that certain statements made by the defendants about the control over content on the Kazaa system were misleading. The defendants contended that they had not authorised the infringement and that the statements in question were not misleading.

The court found that while three of the defendants had indeed authorised the infringement of copyright, the claim against Sharman Network, Mr Morle, BDE Pty Ltd, and Mr Rose failed. The misleading conduct claim was also dismissed as the statements made by the defendants, while possibly exaggerated, were not misleading when considered in their proper context. The court held that the plaintiffs had not proven that the defendants' statements were misleading or that they had failed to provide necessary evidence to substantiate their claims.

The court's final orders included declarations of infringement and threats of infringement, an injunction to prevent the defendants from authorising further infringement, and a stay on the injunction for two months to allow for system modifications. The plaintiffs' claims for pecuniary relief, Trade Practices Act claims, Fair Trading Act claims, and the tort of conspiracy were all dismissed. The defendants who were found not to have infringed copyright were ordered to pay no costs, while the infringing respondents were to pay 90% of the plaintiffs' costs.