Peer-to-Peer Lawsuit Faces Legal Hurdle

In a case that tests global jurisdiction issues, a U.S. federal judge is set to consider Monday whether entertainment companies can sue in U.S. courts the off-shore distributor of the Kazaa peer-to-peer file sharing software.

The company behind the popular P-to-P software, Sharman Networks, is incorporated in the island nation of Vanuatu, operates out of Australia, and distributes the software from servers located outside of the U.S.

Los Angeles District Court Judge Stephen Wilson is slated to decide if the entertainment companies may sue Sharman Networks for allowing the illegal trading of their copyrighted works over the company's P-to-P network in U.S. courts.

Sharman Networks is arguing that it has no substantial contacts in the U.S. and therefore the companies lack jurisdiction to take it to court here.

Ongoing Dispute

The hearing is part of a larger case brought by a handful of movie and music companies against P-to-P networks Kazaa, Morpheus, and Grokster. The entertainment companies are seeking a summary judgment against the defendants, claiming that they knowingly allow copyright-protected works to be traded on their networks, dubbing them "candy stores of infringement."

A hearing to consider the summary judgment is scheduled for December 2.

The entertainment powerhouses have already succeeded in a similar bid against P-to-P renegade Napster, which was knocked offline last year. However, unlike Napster, the new generation of P-to-P networks argue that they have no central servers and therefore cannot be shutdown.

Meanwhile, the judge's consideration of whether Kazaa can be sued in the U.S. could help set a precedent concerning global jurisdictional issues.

The hearing is slated for 1:30 p.m. PST Monday at the U.S. District Court for the Central District of California in Los Angeles.