Just when you thought the horizon was clear of tangled legal issues, the fight between Sharman Networks, owner of the Kazaa file-sharing network, and the Australian record industry re-emerged yesterday.

In September, Judge Wilcox of the Federal Court found Sharman guilty of encouraging copyright infringement of music in an action brought by the record companies. Now an appeal will get under way. The Music Industry Piracy Investigations (MIPI) is appealling five points lost in the original hearing in September, although the two it won effectively clipped Sharman’s wings.

The court has set down five days for the hearing. Sharman yesterday set the early pace in the PR battle, publishing a one-sided media release quoting opening remarks by John Ireland SC, Sharman’s counsel, claiming the record industry had led Judge Wilcox “down the garden path”.

In court, Mr Ireland said the business model of the Kazaa Media Desktop  was not to provide unlicensed material, according to Australian IT.

He claimed two “discrete” networks were involved. One, the Gold-files Network , used solely by Kazaa, contained only licensed content. The second network, Fastrack, contained licensed and pirate content but was used by a number of file-sharing networks and was not controlled by Kazaa, he maintained.

Whichever way it goes, this week’s action might be only another step in a long journey. The loser is likely to seek to take the case to the High Court and then a damages hearing, with figures running into tens of millions.

– FOOTNOTE: The Kazaa Web site currently displays a large message to Australian Web surfers: “! The download of the Kazaa Media desktop by users in Australia is not permitted”.