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Several months ago, Sharman Networks filed a lawsuit against P2PNet, a move that surprised many. Now, however, the company has dropped the suit, at least partially. The owner of P2PNet is probably breathing a sign of relief, and so are some users of his software:

P2Pnet.net owner Jon Newton today posted a court document revealing that Sharman Networks has "discontinued" it actions against Newton, his ISP Interserver and four people who posted comments anonymously to the the P2Pnet site. Sharman CEO Nikki Hemming has also dropped her actions against three of the anonymous posters but upheld her complaint against Newton, his ISP and one of the anonymous posters. An updated version of Hemming's libel lawsuit points to an allegedly defamatory article posted by Newton that contains additional comments from the anonymous poster.
When even the P2P companies are after each others throats, it paints a dismal picture for the future of file swapping. Legal, illegal, gray-area or otherwise, anyone trying to come across as reputable using P2P will have a tough battle ahead.