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Record companies reach settlement with file-sharing site LimeWire

Several major record companies announced Thursday that they have reached a $105 million settlement with music file-sharing website LimeWire [website]. A judge for the US District Court for the Southern District of New York [official website] had issued a permanent injunction [text, PDF] in October to prevent the site from providing online users with the software necessary to share copyrighted files. The district court ruled that the Recording Industry Association of America (RIAA) [trade website] has suffered and continues to suffer irreparable harm to its business and that even a permanent injunction will not give RIAA adequate remedy for its potential future injury as a result of continued peer-to-peer (P2P) file sharing. The court also decided that LimeWire intentionally encouraged copyright infringement, particularly in light of its knowledge of other recent cases involving illegal file-sharing websites, like Grokster and Aimster [EFF materials]. The RIAA welcomed the settlement agreement:

The significant settlement underscores the Supreme Court’s unanimous ruling in the Grokster case—designing and operating services to profit from the theft of the world’s greatest music comes with a stiff price. The resolution of this case is another milestone in the continuing evolution of online music to a legitimate marketplace that appropriately rewards creators. This hard fought victory is reason for celebration by the entire music community, its fans and the legal services that play by the rules.
If a settlement had not been reached, LimeWire found Mark Gorton could have been liable for as much as $1.4 billion.

The US music industry has been actively litigating alleged copyright infringement in person-to-person online file sharing. In January 2010, a federal judge reduced [JURIST report] a $1.92 million jury verdict against a Minnesota woman who was found to have violated music copyrights to about $54,000. Chief Judge Michael Davis of the US District Court for the District Court of Minnesota [official website] called the damages amount "monstrous and shocking" and said the facts of the case could not justify the jury verdict. Davis emphasized that the defendant was an individual consumer who downloaded music for her own use and not for profit and also said that the damages to the plaintiffs, members of the RIAA, did not support the verdict. The judge ultimately decided the award should be triple the statutory minimum of $750 per song, because the defendant willfully shared 24 songs on the file-sharing program KaZaA [website] and because of the need for deterrence. In 2008, the RIAA said that it would discontinue its controversial policy [JURIST report] of suing suspected file-sharers and instead will seek cooperation with major Internet service providers to cut off access to repeat offenders.

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About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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