Federal Court paves way for contempt proceedings.

The full bench of the Australian Federal Court today (March 23) gave 32 record companies the green light for contempt of court proceedings against the operators of the Kazaa file sharing software.

The labels include Universal Music Australia, EMI Music Australia, Sony BMG Music Entertainment (Australia) and Warner Music Australia.

Contempt proceedings were initiated in December 2005 against Sharman Networks Ltd, LEF Interactive Pty Ltd, Altnet Inc, BDE Inc, Nikki Hemming and Kevin Bermeister.

The labels claimed Kazaa's operators had breached a judgment from three months before. In September 2005, Justice Murray Wilcox's brought down his landmark judgment, which found Sharman and its associates guilty of infringing the labels' copyright.

While Kazaa's operators waited for an appeal, he instructed them to stop authorizing music copyright infringement in their technology. Rather than implementing keyword filters, Sharman chose to block access to Australians, arguing it had the same effect.

When labels initially launched charges of contempt, Sharman argued that Murray's instruction was ambiguous and was "incapable of giving rise to a contempt charge."

Today, the three judges disagreed. Justice Catherine Branson said the evidence might establish, for example, that Kazaa's operators "jointly decided that neither they, nor any of them, would accord any respect to the orders made by (Justice Wilcox).

"(But) rather, both individually and together, they would encourage existing Kazaa users to continue copying the sound recordings ... and recruit new Kazaa users to do the same."

Justices Kevin Lindgren and Ray Finkelstein concurred.

Sharman Networks commented: "Today's case was procedural and the judge has confirmed that another court will consider this matter. This clarification by the judge is useful and we look forward to the opportunity to test the record companies' allegations."

The record companies launched legal proceedings against Kazaa's operators in February 2004.