More on Sharman's counterclaim against entertainment Industry

Sharman's suit, which alleges that the entertainment industry engaged in anticompetitive behavior and unfair business practices against Sharman Networks, its joint enterprise partner Altnet, and peer-to-peer technology, will now proceed on key claims and may be expanded pending resolution of a related appeal to include extensive claims for antitrust law violations.

In his ruling, Judge Wilson acknowledged that Sharman Networks has every right to pursue its claims that the record label and motion picture plaintiffs in the lawsuit have infringed Sharman's copyrights. Unlike the plaintiffs' claims that third parties are infringing their copyrights, the court has ruled that Sharman may pursue its claim that these plaintiffs directly and through their agents infringed Sharman's copyrights. In addition, Sharman Networks can now also pursue its claims that the industry plaintiffs breached the End User License Agreement (EULA) for the Kazaa software by:

* Using the Kazaa software to transmit and download spoofed or corrupted files.
* Violating state and federal personal privacy laws and the rights of individual computer users by hacking and exploring files located on their computers.
* Using the Kazaa Software's instant messenger functionality to send threatening messages to other users of Kazaa software.

In addition, the amended counterclaim details:

* Collusion of the plaintiffs to apply pressure to advertisers, ISPs and business partners of Sharman and/or Altnet.
* Public smear campaigns to undermine Sharman, Altnet and peer-to-peer technology.
* Restrictive anti-peer-to-peer licensing practices by plaintiffs - "Dead End Licenses"- designed to exclude peer-to-peer distribution.

Sharman Networks CEO, Nikki Hemming said: "There have been a number of encouraging developments recently, from the Federal Appeals Court ruling in the Verizon case to the Dutch Supreme Court endorsement of p2p's legality, as well as damning public reaction to the RIAA's most recent tactics. Their actions have been lambasted by members of the US Government, including Senator Norm Coleman who stated: 'The decision by the RIAA to rely primarily on the fear of the courts and litigation to pummel P2P users is unfortunate and misdirected.' Sharman concurs wholeheartedly with the Senator's view.

"We have said from the beginning that we take little pleasure in using the judicial system to place the spotlight on the entertainment industry's behavior, but we have no choice. The entertainment industry has lost its way, choosing a path of endless litigation rather than accepting a solution to copyright infringement that is available now, and a technology that is inexorable."