P2P service must apply filter by Dec. 5.

Australia's Federal Court today (Nov. 24) gave peer-to-peer file-sharing network Kazaa a deadline of Dec. 5 to either filter copyrighted music from its system or face a complete shutdown.

The Sydney court said Kazaa must apply a new keyword filter system within the 10-day timetable as a first step to avoid closure.

In September, the Court found Sharman and five others liable for authorizing Kazaa users to infringe the copyrighted recordings of 30 record labels.

Explaining his orders, Justice Wilcox today said the record companies were "entitled to have the benefit of a judgment in their favor. That is very important. Copyright infringement is occurring on an enormous scale at this moment."

The filter technology will involve at least 3,000 keywords, which will be selected by record companies. All new versions of the Kazaa software will be covered by the application. In the past, Kazaa parent Sharman Networks has claimed it could not filter out copyright-infringing material from the system's software.

The international industry welcomed today's decision. "Kazaa has received its final warning," comments IFPI chairman/CEO John Kennedy. "It is time for services like Kazaa to move on -- to filter, go legal or make way for others who are trying to build a digital music business the correct and legal way."

Stephen Peach, CEO of the Australian Record Industry Assn, described the decision as "excellent news for all artists going into the Christmas period."

On Nov. 17, Judge Michael Moore also ruled in the Federal Court that Kazaa parent Sharman Network's CEO Nikki Hemming had to submit to questions about her assets and supply an affidavit by Dec. 9 listing all Sharman's assets, including details of bank accounts, balances and trusts.