MELBOURNE, Australia — The assets of Sharman Networks, the maker of the Kazaa peer-to-peer software, have been frozen pending the outcome of a lawsuit brought against the software-maker by the recording industry.
The personal assets of Sharman’s directors, including their homes, have also been frozen following the latest legal push. Australia’s Federal Court heard the music industry’s motion in Sydney on Friday. The assets of Altnet, which licenses technology to Sharman and is a co-respondent in the action brought against Sharman, have also been affected.
The maneuvering comes just days after Altnet said it would set up a fund designed to give independent record labels a share of Kazaa’s advertising revenue. Lee Jaffe, Altnet’s president, told Wired News the asset freeze is nothing more than an attempt by the major record labels to choke off a revenue stream destined for the cartel’s smaller rivals.
“They’re just trying to freeze any money going to independents,” Jaffe said. “We made an announcement that we had convinced Sharman to share its advertising revenue with all the labels that we’ve signed deals with … and I think that really freaked them out.”
However, Michael Speck, the managing director of Australia’s Music Industry Piracy Investigations, a division of the Australian Recording Industry Association, says the action has more to do with preserving the assets of the respondents in the Kazaa case.
“What freaked us out is finding out they’d sold their homes,” Speck said. Sharman CEO Nikki Hemming recently sold her house to Sharman’s accountant for a profit, only 12 months after she bought it, Speck added.
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