Internet file-swapping was dealt a fresh blow today after an Australian court ordered the world's largest file-sharing service to filter out copyrighted material from its network.
Kazaa, a programme estimated to be used for four out of five internet file-swaps, will have to include copyright filters in future editions of its software and put pressure on its current users to upgrade to the new version.
More than 317 million people have downloaded Kazaa - which allows users to swap music, film and other digital information over the web - and several million are believed to be using it at any one time.
The ruling, by Australia's federal court, found file-sharing copyrighted material over the network was illegal. "Both the user who makes the file available and the user who downloads a copy infringes the owner's copyright," the ruling stated.
The judgment against Sharman Networks, Kazaa's Sydney-based owners, is a further blow to internet file-swapping and follows a series of adverse rulings in recent months.
Although Australian courts do not have jurisdiction overseas, their rulings customarily influence the development of law in other commonwealth countries, including Britain.
Yaman Akdeniz, the director of Cyber-Rights and Cyber-Liberties, said that the judgment would simply increase the exodus of users moving to alternative file-sharing applications.
"The number of users on Kazaa is already going down ever since it started to be targeted," he said. "If you put a successful copyright filter on it, there won't be anything left because most of the swapping done there is illegal."
However, he said the ruling was unlikely to stop file-swapping altogether, adding: "The legal system is slow and always lagging behind the software development."
In June, the US supreme court ruled that makers of peer-to-peer software could be held liable for the copyright infringement of their users. Peer-to-peer pioneer Napster was shut down in 2001 after a US court ordered it to stop users swapping copyrighted files.
Napster has since relaunched as a paid-for music file download service.
The music industry blames the growth of file-sharing software for its poor performance in recent years. CD sales have dropped 25% since file-sharing began to take off in 1999.
Kazaa, which moved to headquarters in Australia and a registration in the Pacific tax haven of Vanuatu after a similar court case in the Netherlands in 2001, was developed by the Swedish internet pioneer Niklas Zennstrom.
He has since become known for writing the software for the internet telephony service Skype.
Sharman and the five other defendants will also have to pay damages and 90% of the costs incurred by Universal Music Australia, which brought the case.