updated 2/10/2004 2:55:05 PM ET 2004-02-10T19:55:05

The owners of file-sharing giant Kazaa asked a federal court Tuesday to rule as inadmissible evidence record industry investigators collected during several raids last week.

Lawyers for Sharman Networks, which owns Kazaa, questioned whether the Federal Court in Sydney had the power to allow the 12 raids in three Australian states, including those on the homes of Sharman chief executive officer Nikki Hemming and the company's director of technology, Phil Morle.

Sharman also applied for Australian breach of copyright legal action against Kazaa to be halted until a similar case is finalized in the United States.

Judge Murray Wilcox adjourned the case until Feb. 20. No details of evidence gathered in the raids by a group called Music Industry Piracy Investigations, or MIPI, were revealed in court.

MIPI is funded by six major Australian record labels who want the federal court to shut down Kazaa's alleged copyright infringement activities.

In a statement, Sharman said the raids were unnecessary as the company has already provided similar evidence for the U.S. legal proceedings.

Extra evidence
"The recording industry plaintiffs, through their representative MIPI, have used the legal equivalent of a nuclear bomb to obtain documentation that is already being readily produced by Sharman through the U.S. court system," Sharman said.

Universities and Internet service providers were also raided under a rarely used law that allows civil litigants to gather evidence from parties they are suing.

MIPI general manager Michael Speck said the aim of the civil action was to shut down Kazaa's allegedly illegal copyright infringement activities.

"Their time is up," he said. "We're confident the court will say that."

A three-judge panel in Pasadena, Calif., is hearing arguments from music publishers and film studios who want to overturn a landmark ruling that cleared two companies of liability for users who swap files using their software.

Sharman is a co-defendant in the lawsuits against Grokster and StreamCast, but the company was added to the case after it was already in progress and was not included in U.S. District Court summary judgment ruling.

"These proceedings, if they are to go ahead at all, ought not to go ahead until the end of the American proceedings," Francis Douglas, counsel for Sharman Networks, said of the case in Sydney.

Cases lost in America, Netherlands
David Casselman, who is representing Sharman in the U.S. case, said the Australian litigation was just another opportunity for record labels to target the company after losing similar cases in America and the Netherlands.

"Now that they're losing in the United States they seek to come here and fight the same battle on Australian soil," he said.

In December, the Dutch Supreme Court ruled that Kazaa's makers cannot be held liable for copyright infringement of music or movies swapped on its free software.

Sharman has denied it promotes copyright piracy, saying it has no control over what users do with its software.

Kazaa's Media Desktop software, one of several programs that let users swap music, movies and other computer files, has 3 million to 4 million users at any given time.

Casselman said suing Kazaa for breach of copyright would be the same as taking legal action against the makers of photocopiers.

"It's no different than the Xerox Corp., when students use their copiers and they know that students use their copiers to make photocopies of protected works," he said. "Is the university liable if they know this?"

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