Record companies allege that Sharman Networks, the owner of Kazaa, didn't comply with an Australian Federal Court order to modify the software to ensure 3,000 keywords would be filtered by Dec. 5.
However, Sharman disagreed since it managed toby identifying their Internet Protocol address.
"Contempt proceedings are fairly rare in this court and I've never yet sent anyone to jail," Justice Murray Wilcox said Thursday in the Federal Court in Sydney. "I've threatened to a few times, but there's always a first I suppose."
The motion includes Sharman Networks Chief Executive Nikki Hemming, Altnet Chief Executive Kevin Bermeister, and associated companies Sharman Networks, LEF Interactive, Altnet and Brilliant Digital Entertainment.
Wilcox will hear the record industry's motion for contempt of court on Jan. 30.
"If there has been a breach (of the court order), that's contempt of court," Wilcox said. "On the other hand, if (the order) has been complied with, that's the end of the contempt charge. This motion is going to raise the matter of whether there is compliance or not."
Counsel for the record industry, Tony Bannon, said his side "didn't want" an imprisonment outcome, but argued that Sharman had failed to comply with the order.
"What they have done or attempted to do was to prevent downloads of the Kazaa software to Australian (Internet Protocol) users," Bannon said, claiming this had been "ineffective."
"They've continued to supply unfiltering versions of the software to many users, the copyright infringements continue...They continue to supply advertising...We say that's a clear breach" of the order, Bannon said.
However, John Ireland, counsel for Sharman, said his client had complied with the order: "What we did in lieu of implementing the filter was to take down the availability of this program in Australia completely. We say that that action involves obedience to the injunction and that is the issue on the contempt application."
The order "involved the continued making available of the software in Australia to anyone that wanted it," Ireland said. "That has ended."
Although he scheduled the motion for hearing, Wilcox again showed signs of frustration with the prolonged nature of the case, and blamed participants on both sides.
"I would cheerfully have nothing more to do with this case. I don't wake up in the morning and think 'I'd like a bit more Kazaa today,'" he said, citing learning about the technology as "quite time-consuming."
In September, after an 18-month battle, the judged ruled that Sharman and associated parties had authorized users of Kazaa to breach copyright.
Steven Deare reported for ZDNet Australia from Sydney.