In its own court filing Friday, Kazaa said it could not afford to continue the case and that it would accept a default judgment. That could put the two-person company on the hook for damages in the millions or tens of millions of dollars, forcing it out of business altogether. "Simply put, plaintiffs have run Kazaa out of business," Kazaa's attorneys said in their court filing. "Accordingly, Kazaa has asked plaintiffs for their terms of surrender." An attorney for Grokster, the third file-swapping company in the Kazaa lawsuit, could not be reached for comment. Kazaa sold the actual Kazaa file-swapping software to a Vanuatu-based company called Sharman Networks in February. It maintained control of the underlying peer-to-peer technology, called FastTrack. Despite their court filing, Kazaa's founders already appear to be licensing the FastTrack technology though another company. According to documents filed with federal regulators in the United States, a company called Blastoise -- owned and operated by the Kazaa founders -- has already licensed the FastTrack technology to a Los Angeles company named Brilliant Digital Entertainment. According to those documents filed 1 April, Blastoise -- operating under the name Joltid -- licensed the FastTrack technology to a Brilliant Digital subsidiary called Altnet, whose software contains the core of a new peer-to-peer network. Blastoise also took a 49 percent stake in Altnet, according to the filing. Sharman, which now provides the actual Kazaa file-swapping software, also plans to continue using the FastTrack technology. A Sharman representative said the company had been assured that the license to the technology would continue even if the Kazaa company goes under. Sharman, which has seen tens of millions of people download the Kazaa software since the company acquired it in February, has not yet been sued. Executives from the RIAA said that Kazaa, Sharman and the other parties were simply trying to evade judgment by shifting corporate assets between different companies. "They're playing an international shell game, trying to make a mockery of the judicial process," said Matt Oppenheim, senior vice president for the RIAA. A trial date is scheduled for 1 October, although the current round of difficulties could change that. Sharman released its own new version of the Kazaa file-swapping software Wednesday. It includes the first portions of the Altnet network, which will sprinkle paid search results into ordinary Kazaa searches, as well as a few new security features.
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