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Major Labels Settle Suit with LimeWire

May 13, 2011  |  3:35pm
Major Labels Settle Suit with LimeWire

After a five-year legal battle over music piracy, major record companies settled a copyright infringement lawsuit against LimeWire, the peer-to-peer file-sharing network, for $105 million.

Filed in 2006, the suit from the labels and the Recording Industry Association of America (RIAA) accused LimeWire of creating and running a service “devoted essentially” to piracy. LimeWire allowed users to upload, share and download files without permission from outside entities (e.g. record labels).

The suit identified more than 9,000 recordings since 1972 that were traded on LimeWire, and the labels then asked for $105,000 per song.

The labels had actually sought $1.4 billion total in damages, but they hope the $105 million will “act as a deterrent to further privacy,” writes the New York Times, because the defendant, CEO and site creator of LimeWire, Mark Gorton, will face liability.

Mitch Bainwol, the RIAA’s chairman, said in a statement, “We are pleased to have reached a large monetary settlement following the court’s finding that both LimeWire and its founder Mark Gorton personally liable for copyright infringement. As the court heard during the last two weeks, LimeWire wreaked enormous damage on the music community, helping contribute to thousands of lost jobs and fewer opportunities for aspiring artists.”

A year ago, Judge Kimba M. Wood of United States District Court in Manhattan ruled that LimeWire had definitely violated copyrights. When the settlement was reached, the case went to trial to set damages.

In October of last year, Judge Wood ordered LimeWire to disable most of their services; the company said it was shutting down on Dec. 31.

LimeWire argued that file-sharing was not exclusively responsible for the recording industry’s precipitous sales decline (although sales, for the first time since the early ‘00s, have actually increased recently). “The record companies know and have known that their problems started well before LimeWire,” said the company’s lawyer, Joseph Baio, in his opening statement at the damages trial.

Kazaa, a service comparable to LimeWire, settled a similar lawsuit five years ago for $115 million.

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