Makers of 'Kazaa' settle lawsuits

WASHINGTON — One of the big guns of the Wild West days of freely downloading music and movies over the Internet is going straight.

Settling lawsuits around the world, the company behind software called "Kazaa" said Thursday it will redesign its pioneering file-sharing program to block customers who try to find and download copyrighted music and movies. It also will offer licensed entertainment for a price, and it agreed to pay more than $115 million in penalties to leading music and movie companies.

The settlement ends one of the longest-running and fiercest copyright disputes of the Internet era, in which the entertainment industry spent millions suing Sharman Networks Ltd. and the company's customers to end the illegal trade of its products.

Sharman Networks pledged to "use all reasonable means" to discourage online piracy, including building into new versions of its software "robust and secure" ways to frustrate computer users who try to find and download copyrighted music and movies, court papers said.

Kazaa's popularity has declined dramatically in recent years amid concerns over "spyware" monitoring programs bundled with its freely distributed software and as new, more efficient downloading services — both legal and illegal — emerged.

"Kazaa has been yesterday's file-sharing technology for some time now," said Eric Garland, chief executive at BigChampagne Online Media Measurement, which tracks online entertainment. "We're resolving court battles months or even years after the cultural relevance of these software applications has waned."

The settlement included payment of $115 million to music companies and a lesser amount to the movie industry, said people familiar with those provisions. They agreed to speak on condition of anonymity because some provisions were included in secret agreements not disclosed in the public court papers. Sharman Networks has already paid nearly all the money to the entertainment industry, these people said.

"While the award may seem like a vast pot of money, it will merely offset the millions we have invested — and will continue to invest — in fighting illegal pirate operations around the world and protecting the works that our artists create," said the vice chairman for EMI Music, David Munns.

The settlement concludes legal battles against Sharman Networks around the world. Sharman Networks has boasted that its Kazaa software was downloaded more than 389 million times, and the company operated the underlying "Fast Track" file-sharing network that connected tens of millions of personal computers.