Sharman Networks, the Australian company that owns the Kazaa file-sharing software, says that it welcomes a US Supreme Court decision regarding file-sharing software that was announced this week and has been widely interpreted as a victory for the entertainment industry.

"We view today’s decision by the US Supreme Court as a clear opportunity for the legal system to vindicate Sharman Networks," said Alan Morris, executive vice president of the company, in a statement.

The court's decision, announced Monday, said that peer-to-peer (P-to-P) file-sharing software developers Grokster and StreamCast Networks can be held liable for copyright infringements committed by their users. In delivering its decision, the court gives entertainment companies the ability to sue P-to-P software makers and sends an ongoing case back to a lower court.

This return to the District Court level is a chance for the legal process to affirm that Sharman has never sought to induce users of the Kazaa Media Desktop software to violate copyright law, the company said.

Not encouraged

"While the Supreme Court apparently found 'substantial evidence... on all elements of inducement' by other P2P providers Grokster and Morpheus, Sharman has never encouraged or assisted users of Kazaa software to share copyrighted material in violation of copyright law," it said.

The company's claims are largely based on its end-user licensing agreement (EULA), which is the lengthy legal document that most users skip over but nonetheless agree to when installing software. The EULA for the Kazaa software addresses copyright infringement in several sections, including section 6.2 which reads in part: "As a condition to use the software, you agree that you must not use the software to infringe the intellectual property or other rights of others, in any way."

The US court ruling said that both Grokster and StreamCast "clearly voiced the objective that recipients use the software to download copyrighted works and took active steps to encourage infringement," when they began distributing their software.

Sharman is currently involved in several court cases, including in the US and Australia. Closing arguments in the Australian case were heard in March and a judgement is currently overdue.

Sharman, which is registered in Vanuatu, has owned the Kazaa software since it was purchased from a Dutch company, Kazaa BV, in January 2002.

A spokeswoman for Sharman's public relations agency in Australia rejected the suggestion that its statement was an attempt to make the best of a bad situation.

"We're in a completely different position," said Julie Fenwick. "We have warnings to users about copyright."