A U.S. District Federal Court issued his long-awaited ruling in the Kazaa case that was brought against Kazaa's owner, Sharman Networks of Australia. U.S. District Court Judge Stephen Wilson's ruling on Friday stated that Sharman Networks can, in fact, be sued in the United States, thus allowing the case filed against Sharman in California to continue. Sharman Networks is based in Australia but incorporated on a remote Pacific island. Sharman had argued that it couldn't be sued in the U.S. because it was not subject to the jurisdiction of U.S./California law, since Sharman had insufficient "contacts" to meet the legal requirement for jurisdiction within the State of California. Judge Wilson's 46-page finding that Sharman could be sued in California was based on the fact that Kazaa file sharing software has been downloaded and accessed by millions of California residents. Wilson's ruling stated in part, "Given that Sharman's (Kazaa) software has been downloaded more than 143 million times, it would be mere cavil to deny that Sharman engages in a significant amount of contact with California residents...many, if not most, music and video copyrights are owned by California-based companies."
Judge Wilson differentiated his ruling from the California State Supreme Court in a similar case that involved a resident of Texas who was sued in California for distributing a DVD-descrambling utility over his Web site in Indiana. The California Supreme Court ruled in the Texas resident case in November 2002 that Internet distribution of software did not subject him to California jurisdiction.
The Motion Picture Association of America and the Recording Industry Association of America applauded Judge Wilson's ruling in the Sharman case. Sharman Networks was unavailable for comment on the Judge's ruling.