updated 11/29/2004 4:08:43 PM ET 2004-11-29T21:08:43

Lawyers for Australia's recording industry branded the popular Kazaa computer file-swapping network "an engine of copyright piracy to a degree of magnitude never before seen" as they launched a court battle Monday to shut down its activities.

Kazaa's owners claim the network's 100 million worldwide users download 3 billion files each month, said lawyer Tony Bannon, who is representing Australia's six major record labels in a case similar to lawsuits against file-sharing services in the United States.

Network users freely exchange songs, movies and television programs without paying royalties to the copyright owners.

During the first day of the trial Monday, lawyers showed federal court judge Murray Wilcox how the system worked by logging onto Kazaa and searching for songs by artists including Australian singer Delta Goodrem and British punk band The Sex Pistols. While they were logged on, the site showed that 2.1 million users were online swapping 1.17 billion files.

The record company lawyers will try to have Kazaa's owners declared liable for copyright breach and loss of earnings in the civil case. If they succeed, a case next year would likely set the damages the owners have to pay.

The 10 defendants include Kazaa's owners, Sharman Networks Ltd., Sharman License Holdings and Sharman's Sydney-based chief executive officer, Nikki Hemming.

Sharman Networks will insist that while they urge users not to commit music piracy, they have no control over what people do with the popular "peer-to-peer" software the network provides.

But at the start of a three-week trial in Sydney on Monday, Bannon said Kazaa's owners provide software that helps users filter certain files from the network -- such as those that could contain viruses or pornography -- but they don't provide software to filter out files containing copyrighted material.

Bannon said the large volume of traffic in pirated files is key to making revenue for Kazaa's owners -- the more people are file-swapping, the more they can attract paying advertisers to their Web site.

He also said that Kazaa software sent lists of popular files to all users' computers -- meaning the service's owners must be able to identify them. Other software identified the type of music files being exchanged. That combination should allow Kazaa's backers to cut off their service to anybody using the network to exchange copyrighted material, Bannon said.

Attorneys for Kazaa's owners were expected to give their opening statement Tuesday.

Members of the entertainment industry have already sued file-sharing services in the United States. Two federal courts in California have cleared Grokster Ltd. and StreamCast Networks Inc. of liability, but the industry has appealed to the U.S. Supreme Court.

Sharman is named in a similar suit pending in a lower court.

Analysts say the U.S. cases likely will not affect the Sydney trial, but all the cases share the principle that a software developer is not directly responsible for its users' activities -- just as Xerox cannot be blamed for copying done on its machines.

Kazaa already has one major court victory under its belt, with the Dutch Supreme Court ruling in December 2003 that the network's Netherlands division cannot be held liable for copyright infringement.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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