Order leaves future of file-sharing firms in question.

After years of legal wrangling, it seems as though Kazaa and its Valley based-partners, Brilliant Digital Entertainment and Altnet Inc. will be forced to face the music, after an Australian judge has ordered the operators of the peer to peer file-sharing network to update their software with a filter to screen out copyrighted material or else face the prospect of being shut down.

This filter in question is intended to prevent users from trading fries containing 3,000 keywords that will be selected by the record companies and will include the names of popular artists and songs. The falter would be updated every two weeks to include the latest releases, according to a statement from the International Federation for the Phonographic Industry.

The case, perhaps the biggest file-sharing case since the United States Supreme Court ruled on Napster, has been ongoing since February 2004, when Music Industry Piracy Investigations, a division of the Australian Recording Industry Association, seized hard drive images and other documents from the Sydney offices of Sherman Oaks-based Altnet and the homes of Kevin Bermeister, the CEO and President of Woodland Hills-based Brilliant Digital and Nikki Hemming, the CEO of Sharman (the parent company of Kazaa), under a court-sanctioned civil search order.

Subsequently, a case against Kazaa et. al was filed by the Australian subsidiaries of most of the big recording labels, including Universal Music Group, Sony BMG Music Entertainment and EMI Group. The companies allege that the Valley companies and Vanuatu-based Sharman were fostering Internet piracy via their file sharing software. The case was filed in Australia due to the proximity of the South Seas headquarters of Sharman.

James Gibson, a professor of intellectual property and computer law at the University of Richmond School of Law, isn't surprised that the Australian judge gave the companies a firm deadline to comply with the law, particularly after the September ruling that found that Kazaa and the others had been used to infringe copyrights on a wide scale.

"This case has been battered around by the courts for quite a while and it's nor surprising that it gave them such a hard deadline to ship up," Gibson said. "The decision reminds me of the Napster case, when the court issued a similar injunction that told Napster to install some sort of filtering system. Napster tried to do such a thing but it didn't meet the court's expectations which led to it having to shutter its doors. These things can be technologically tough to implement."

In a statement released last Thursday, Sharman accused the record labels of trying to shut Kazaa down and "rid themselves improperly of a competitor" rather than working with it to agree on a new filtering system.

Q Goes International

The Burbank-based Q Television network has struck its first international distribution deal with Australia's Selectv, which will become the exclusive satellite provider of QTN programming throughout Australia and New Zealand. The deal will allow Q access into 10 million potential additional households, which represents a major deal for the fledgling startup network.

Launched just last September, Q bills itself as a 24 hour, seven day a week cable and satellite channel featuring original programming designed for the gay and lesbian community.

However, while the company has been around for only a year, it has only begun growing rapidly since July, when QTN began to ink deals with Cox Communications Eureka/Arcata and Time Warner Cable of New York and New Jersey. The deals pushed the number of households that QTN was able to reach from 400,000 to 3,000,000 domestically.

And according to Carol Hinnant, QTN's vice president of affiliate sales and marketing, the Australian deal represents a major step forward for the network.

"The deal had been in the works for a while and came about because of the extensive gay and lesbian population in Australia," Hinnant said. "We were looking for the right satellite provider and we really liked Selectv because of the way they package their products and the way they compete in the satellite market. We see ourselves expanding rapidly in the international markets. We've been talking to people in different countries about distribution deals. We're the exclusive network of the Gay Games and that's the key for us in our international distribution strategy."

Boxing in Burbank

Hector Galvan, the owner of North Hollywood-based Prime Building Materials has been seeing quite a bit of success in a boxing promotion spin-off of his building materials business, as he has begun sponsoring fight nights at the Burbank Hilton. Entitled "Prime Time Fights," Galvan has been sponsoring these bouts for the past two years, packing people into the 1,200 seat capacity venue at the Hilton.

Galvan has sold 800 tickets for the December 9 bout, and his fights have managed to gather significant interest from the Valley's Mexican-American community.

"I'm a really big boxing fan and nobody's brought that type of entertainment to the Valley," Galvan said. "It hasn't been that difficult to get this type of thing going since Prime has a really good reputation, we can get a good showing from the crowds. They know its going to be a good fight. I'm doing it more for the love and not for money."

Galvan has not restricted his promotion activities to just boxing, as he has also sponsored Latino-themed comedy nights at the Odyssey in Granada Hills. As the fights have been quite popular with the community, Galvan plans to continue his promotion activities in the future.

Staff Reporter Jeff Weiss can be reached at [phone] or at [e-mail].