Kazaa's file-swapping structure stymies opponents

TALLINN, Estonia - Their office is spartan, with only five computers in various states of repair and nary a decoration on the wall. Few outside this Baltic capital would even recognize their names, though many of the world's largest recording and movie studios are keenly aware of their accomplishment.

Jaan Tallinn, Ahti Heinla and Priit Kasesalu are the creators of Kazaa.

Over the past two years, the oddly named product has become the most popular online file-swapping system in the world. Roughly 160 million people have downloaded the software, primarily to trade music, TV shows and movies over the Internet. At any given time, more than 3 million people are running the program, double the number that Napster had at its peak.

Kazaa has become so popular so fast that a coalition of entertainment companies has filed suit in U.S. District Court in Los Angeles, seeking to shut it down. The coalition says the service has become a ``candy store of infringement,'' through which millions of pirated copies of songs, writings, TV shows and motion pictures are available to anyone, free.

Those same arguments helped the entertainment industry successfully close down Napster. But going after Kazaa is proving more difficult.

That's because Kazaa is a multinational creation. The three young men who developed the software hail from Estonia. They were commissioned to do the work by a company in the Netherlands. That company has since sold the software to another based in the Pacific island nation of Vanuatu, whose executives work in Australia.

Filing suit against Kazaa, therefore, has forced the entertainment industry to negotiate the legal rules of no fewer than five countries on three continents.

This case ``is one in a series of skirmishes that will determine whether the information network the public enjoys five to 10 years from now is open or closed and to what extent different countries will have a role in controlling it,'' said Jonathan Zittrain, co-director of the Berkman Center for Internet & Society at Harvard University.

For now, there is only legal confusion.

The entertainment companies filed suit against Kazaa in the United States because that's where most of the users are -- about 9.5 million people a month use the software, according to Forrester Research. But in doing so, the coalition set itself up for inevitable clashes with other countries' court systems.

A U.S. judge, for instance, recently ordered Tallinn, Heinla and Kasesalu to cooperate with entertainment industry lawyers seeking documents and testimony on how the software works. But a judge in Estonia rebuffed the request, saying the men did not have to talk -- at least for now.

An appeals court in the Netherlands, meanwhile, ruled that local distributors of the software shouldn't be responsible for piracy by its users. That's the same question in front of the U.S. judge.

Roderick G. Dorman, a lawyer representing Sharman Networks, the current owner of the software, argues that the Vanuatu-based company is not subject to U.S. laws. He worries that a ruling otherwise could set a precedent that invites any country to meddle in another's online ventures.

Lawyers for the Recording Industry Association of America and Motion Picture Association of America, on the other hand, have issued a statement saying Kazaa is perpetrating an ``intricate international shell game aimed at evading the U.S. court's jurisdiction and avoiding liability'' by spreading its operations around the world.

``They did it intentionally to get around the Napster decision,'' said Matthew J. Oppenheim, one of the entertainment industry's lawyers.

Kazaa's founders scoff at the claim. They say the involvement of people from so many countries is happenstance, a product of how easy it is to do business across borders in the Internet age. The programmers insist they did not set out to help people trade music and movies illegally.

Niklas Zennstrom, 36, an originator of Kazaa, said the system, at its core, turns the Internet into a ``global hard drive'' -- and nothing more.

``You can ask for a file and you can download it. That is all the technology does,'' Zennstrom said.

Zennstrom, nevertheless, believes a more controlled distribution system for digital files is in store. The programming team is now working on a file-swapping system that would allow people to dictate how their content is to be distributed -- whether it will be free for all, free for a few days and then locked, cost $5 a file, and so on. It also would allow people to copy from the nearest and least busy computer, allowing then to disseminate information much more cheaply and much faster than through centralized systems.

Zennstrom has negotiated a contract with a company called Altnet to provide technology for its online distribution system. Altnet is also using Microsoft technology to provide a way for people to pay for content.

But before the rest of Hollywood embraces such technology, industry analysts said, the lawsuits must be resolved.