The legal battle between Kazaa and the music industry begins its next chapter today as the file-sharing service heads back to court to appeal a judge's ruling that found it guilty of inducing copyright infringement.

The controversial, Australia-based peer-to-peer (P2P) service hopes to avoid being shut down by convincing a full bench of the Australian Federal Court in Sydney to reverse the ruling from last September.

But the Australian recording industry--some 30 record labels--also found some parts of the prior decision unfavorable to its argument and is also appealing the decision.

Kazaa is owned by Sydney-based Sharman Networks.

"Sharman Networks is determined to resist the record companies' appeal in this case and bring its own appeal presenting arguments against the record companies' position," the company said today in a statement. "We are confident that the ultimate outcome of this case will be positive for Kazaa."

The case has taken quite a few twists since its February 2004 inception, and even more turns since the ruling last September.

When Kazaa announced its intention to appeal the case, Federal Justice Murray Wilcox agreed to delay the shutdown on the condition that Sharman install a keyword-filtering system by December 5 that would block access in Australia to some 3,000 popular artists such as Kylie Minogue, Madonna, and Eminem.

But instead of implementing filters, the company blocked network access to all Australian users, a measure Sharman said complied with the court order pending the outcome of the appeal.

The music industry, however, did not agree, saying the blocking of network access only prevented new users from committing copyright infringement--not existing ones. The industry then filed a motion asking Wilcox to find Sharman CEO Nikki Hemming and Kevin Bermeister, CEO of Kazaa technology partner Altnet, in contempt of court.

The appeal hearing is expected to last five days.