The Federal Court in Sydney has rejected an application by P2P service Kazaa's parent Sharman Networks to have evidence collected during February raids in three Australian states declared invalid.

SYDNEY--The Federal Court in Sydney has rejected an application by P2P service Kazaa's parent Sharman Networks to have evidence collected during February raids in three Australian states declared invalid.

Sharman's lawyers had asked the Federal Court in Sydney Feb. 10 to rule that evidence collected in Feb. 6 raids by the Music Industry Piracy Investigation (MIPI) unit be ruled inadmissible.

Sharman argued that MIPI had obtained the order from Justice Murray Wilcox by portraying the company as a "fly by night" operator, and had not disclosed that Sharman had been cooperating by providing 4,000 documents in an appeal case being heard in California.

The Court of Appeals in Pasadena, Calif., is currently considering arguments from music publishers and film studios who want to reverse a 2003 Los Angeles federal court ruling on file-sharing liability. Sharman was a co-defendant in the original case which led to that ruling.

A NECESSARY EVIL

On March 4, Justice Wilcox dismissed Sharman's application to have the evidence from the raids ruled inadmissible. He ruled that the search orders were necessary for the six record labels which fund MIPI to collect evidence of possible copyright infringement.

"It is obviously an essential part of the applicants' case to put evidence before the court about the dynamic operation of the Kazaa system," Justice Wilcox said.

He also said the non-disclosure by MIPI of Sharman's cooperation with the Pasadena court was "not material."

The two parties in the potential civil case over copyright infringement will return to court for another hearing on March 23, when the evidence seized in the raids will be handed over to MIPI.

At the direction of the court, this evidence has been held by a lawyer nominated by Sharman since the raids. The premises involved in the Feb. 6 raids included the offices and homes of Sharman executives.

'FACING THE MUSIC'

Judge Wilcox also dismissed an application by Sharman to have all proceedings delayed until judgment was handed down on the Californian appeal.

The judge had previously indicated that he would reserve judgment over whether proceedings should go ahead until the Californian case was resolved. No date has yet been set for Justice Wilcox to rule on whether the Australian case will proceed.

MIPI general manager Michael Speck calls the Court's latest decision latest ruling "a win for copyright owners." He adds: "It's time for Kazaa to stop these delaying tactics and get ready to face the music."

MIPI is owned by Universal Music, Festival Mushroom Records, EMI Music, Sony Music Entertainment Australia, Warner Music Australia and BMG Australia.

Sharman executives could not be reached.

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