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In what is likely to be the central nub of the defence case, Meagher pointed out a 1984 Supreme Court ruling brought against electronics giant Sony, the case was thrown out because the VCR was seen to have other uses beyond piracy.

The Surpreme Court ruling was the basis on which other file sharing companies, for example Grokster and StreamCast Networks, were cleared by the 9th Circuit Court in California of copyright infringement.

Today, Sony through its music arm, is one of the plaintiffs alleging that the technology infringes copyright

The other leg of the Kazaa defence is that, because of the way the software is written, the publishers Sharman Networks are not in a position to monitor the p2p traffic and block any downloads which infringe copyright. 'We are not in a position to control and we do not control use,' Meagher said.

However, the music business disputes this and believes they can prove that Sharman is willfully not including copyright monitoring in Kazaa. The court has ruled that Sharman Networks must hand over the source code to its own software experts to prove that copyright protection can be implemented. Sharman is

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so far resisting.

If the music industry wins, it is likely to seek billions of dollars in reparations and punitive damages from Sharman Networks, its officers and allied companies. It will also set a precedent to pursue other file sharing operations.

Getting the money might be a different matter. Sharman Networks is incorporated in Vanuatu where companies do not have to give details of ownership. Without knowing who owns Sharman, it might be difficult recovering any damages although the music companies say they will prove during the course of the trial that the company is owned by Nikki Hemming, the CEO of Sharman, and Kevin Bermeister, the CEO of Brilliant Digital Entertainment

The money is not really the issue, although putting Sharman out of business is the main focus. The case is considered to be pivotal for the future of Kazaa because - despite successive losses in the US - if the music business can win one in a respected overseas court, then Sharman and Kazaa can be painted as an illegitimate business and pursued on that basis around the world.

In this sense the music industry is following a path blazed earlier this year by Microsoft in its pursuit of Linux distributor Lindows. Despite losing its copyright infringement case in the US Courts, Microsoft launched a number of legal challenges around the world until it won one, in the Netherlands. Armed with its injunction, Microsoft then pursued Lindows claiming that despite taking down the Dutch site, Lindows was in contempt of court because the US website could still be 'seen' from Holland.

The Kazaa case is likely to run up until 17 December when the Australian Court rises for its summer recess. A final judgement is therefore not expected before the new year.