The Federal Court of Australia last week gave leave to representatives of the Australian record industry to commence contempt of court proceedings against Sharman License Holdings Pty Ltd, owner of the (formerly) popular file-sharing program Kazaa.

The plaintiffs allege that by failing to comply with the orders of Wilcox J after last year’s trial, Sharman is acting in contempt of court. In finding that Sharman’s program infringed copyright in the plaintiffs’ music, his Honour ordered the unsuccessful defendant to implement a keyword filtering system that would block access to copyright works on the network. The deadline for doing so was 5 December 2005. Sharman instead chose simply to block access to the Kazaa network from within Australia, leaving the rest of the network unfiltered.

Sharman Networks said: “Today’s case was procedural and the judge has confirmed that another court will consider this matter. This clarification by the judge is useful and we look forward to the opportunity to test the record companies’ allegations.”

These latest proceedings are more than likely the result of an aggressive bargaining position being adopted by the plaintiffs in an effort to prevent an appeal against Wilcox J’s decision. With few remaining cash reserves and its primary source of revenue deemed infringement, I would not be surprised if the next legal battle for Sharman was heard in the bankruptcy list.