Kazaa fires back at Hollywood Labels

Sharman Networks, owner of the popular Kazaa file-swapping software, has launched a legal counterstrike against the major record labels and Hollywood studios, asserting they have "obscenely" abused their copyright powers

In a lawsuit filed late Monday in federal court in Los Angeles, Sharman claims that major entertainment companies have colluded to drive potential online rivals out of business. The conduct should preclude the industry from being able to defend its copyrights in court, at least until the behavior is corrected, Sharman contends.

The lawsuit is a counterstrike by Sharman, which has been sued for allegedly contributing to massive online copyright infringement. Last week, a federal judge ruled that record companies and movie studios can proceed with their lawsuit against Sharman.

The entertainment industry considers Sharman to be as much an outlaw as Napster and Aimster, two file-sharing services that have been shuttered. But Sharman executives say their business is fundamentally different because the company was created to take advantage of legal online distribution.

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