February 6, 2004 - Sydney, Australia - Sharman Networks, owner and distributor of Kazaa - the world’s most popular file sharing software, was today served with a “search and seize” order made by Justice Wilcox of the Federal Court of Australia.

The order was served at Sharman’s Sydney offices on behalf of the Australian arms of the major recording industry companies. Similar orders were also served at the private homes of two Sharman Networks executives. Sharman will be applying to have these orders set aside, but in the meantime is complying with the terms of the order.

The orders served today relate to separate proceedings in Australia, and are not connected to the litigation currently underway in the US courts.

“This action appears to be an extraordinary waste of time, money and resources going over legal ground that has been well and truly covered in the US and Dutch Courts over the past 18 months,” the company said.

“This is a knee-jerk reaction by the recording industry to discredit Sharman Networks and the Kazaa software, following a number of recent court decisions around the world that have ruled against the entertainment industry’s agenda to stamp out peer-to-peer technology.

“There is no doubt this is a cynical attempt by the industry to disrupt our business, regain lost momentum, and garner publicity. The assertions by plaintiffs are hackneyed and worn out. It is a gross misrepresentation of Sharman’s business to suggest that the company in any way facilitates or encourages copyright infringement.

“Sharman bought the Kazaa software two years ago with the express purpose of building it into a legitimate channel for the distribution of licensed, copyright protected content which in turn financially benefits artists. This model has already proven to be successful.”