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Sharman Networks, the operator of the Kazaa P2P, has been ordered by the Australian Federal Court to alter its software. The Court found that Sharman Networks and five other defendants involved in developing Kazaa have violated Australian copyright law. This may spell the end of Kazaa, since it is likely that damages amounting to some $760 million may be sought.

In the text of his ruling, Justice Murray R. Wilcox - the senior associate judge of the Court - declared Sharman and five of the case's nine co-defendants, including P2P engineer Altnet, guilty of enticing Australians to make and distribute unauthorized sound recordings without license, as well as collectively "entering into a common design" that enabled unauthorized trafficking, though stopping short of qualifying as a "conspiracy."
As a result of this, the Kazaa network will be restrained from continuing to operate in Australia. However, that order is on hold for two months, allowing Sharman Networks the opportunity to develop an updated version that excludes copyrighted works.