Sharman Networks, the company behind Kazaa, is the latest file-sharing software company to reach a settlement with the music industry. Napster is now an entirely legal download site and Grokster lost a landmark court case over its responsibilities for file sharing and shut down.
The NMPA said that it had pursued a class action law suit against Kazaa for infringement of the copyright of its members, typically the authors of songs or people who had bought those rights from authors.
It said that it had informed the US District Court that it would not be pursuing its action because Sharman Networks had agreed to pay an undisclosed "substantial sum" to settle the dispute.
In July Sharman said that it had settled with record labels and agreed to block users from moving music around its network without permission or rights holders. It paid $115 million in penalties, it said.
The companies behind the software that operates peer-to-peer (P2P) file-sharing networks had always argued that they were not responsible for the activities of users. In Grokster's case, which began in 2001 and only ended in 2005, the judge ruled that companies were liable for that illegal use.
Grokster's “unlawful objective is unmistakable,” wrote Justice David H Souter in September 2005, delivering the opinion of the court in a unanimous decision. Grokster closed not long afterwards, and though the company said that it would return with a new service, Grokster3g, that has not happened yet.
Sharman Networks said that it would continue as a paid-for service, though it is not yet clear whether it will charge per song or on a subscription basis, like some rivals.
