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Federal Judge in New York Puts the Squeeze on LimeWire Music File-Sharing

October 26, 2010

Judge Kimba Wood of the U.S. District Court for the Southern District of New York on Oct. 26 issued an order that permanently enjoined the LimeWire peer-to-peer file-sharing service from further infringing the copyrighted works of Arista Records LLC, BMG Music and 11 other record companies (Arista Records LLC v. Lime Wire LLC, S.D.N.Y., No. 06 Civ. 05936 (KMW), 10/26/10).

Biggest Music Labels Sue Over LimeWire File-Sharing Program.

Arista Records LLC, BMG Music, and 11 other recording label plaintiffs in this case sell and distribute the vast majority of all recorded music in the United States. In total, they own the copyrights or exclusive rights to more than 3000 sound recordings.

The plaintiffs brought this suit against Lime Wire LLC, its sole director, Mark Gorton, and several defendants, alleging that the highly popular LimeWire peer-to-peer Internet file-sharing service infringes the copyrights in 30 songs, 25 of which were made after 1972. Sound recordings created before February 15, 1972 are protected from infringement by New York common law, while those made after 1972 have protection under federal copyright law. The plaintiffs produced copies of agreements granting them common law copyrights in the pre-1972 works and provided federal registrations for the post-1972 works.

Permanent Injunction Warranted Given ‘Massive Scale’ of Infringement.

In May 2010, Judge Kimba Wood issued an order granting the plaintiffs’ motion for summary judgment on their claims of inducement of copyright infringement, common law copyright infringement, and unfair competition. On October 26, Wood ruled that a permanent injunction was warranted in the plaintiffs’ favor.

Quoting from her May order as to liability, Wood found as a matter of law that the evidence showed:

  • Lime Wire “intentionally encouraged direct infringement” by Lime Wire users.
  • The LimeWire client software is used “overwhelmingly for infringement, and allows for infringement on a massive scale.
  • Lime Wire knew about “the substantial infringement being committed” by LimeWire users.
  • Lime Wire marketed itself to Napster users, who were known copyright infringers, and promoted LimeWire’s infringing capabilities.
  • Lime Wire ‘actively assisted infringing users” in their efforts and tested the LimeWire client software by searching for copyrighted material.
  • Lime Wire failed to implement any meaningful technological barriers or design choices aimed at diminishing infringement.
  • Lime Wire’s business model depends of mass infringement, relying on a “massive user population generated by” the LimeWire software’s “infringement-enabling features.”

Even assuming the defendants can pay it, any amount of damages likely to be awarded would still be inadequate compensation given the irreparable harm in this case, Wood reasoned. Since the parties filed their motions for summary judgment in this case in 2008, “LimeWire has continued to be a tool of choice for rampant infringement of Plaintiffs’ works,” she said, noting that the program has been downloaded 50 million times on download.com. According to Wood, the total number of LimeWire downloads from that site alone—not including the downloads from Lime Wire’s own site—is “more than 200 million (and counting). In short, LimeWire’s already enormous installed base has only gotten bigger in the last two years.”

This “widespread dissemination of the LimeWire software has left Plaintiffs’ copyrighted works vulnerable to massive and continuing infringement by millions upon millions of users,” Wood wrote. While damages will be part of the proper remedy for past infringement, “they cannot protect Plaintiffs from future infringement. Only a permanent injunction can do so.”

The other plaintiffs in this case were Atlantic Recording Corp., Capitol Records Inc., Elektra Entertainment Group Inc., Interscope Records, LaFace Records LLC, Motown Record Co. L.P, Priority Records LLC, Sony Music Entertainment, UMG Recordings Inc., Virgin Records America Inc., and Warner Bros. Records Inc. The plaintiffs were represented by Glenn D. Pomerantz of Munger, Tolles & Olson, Los Angeles.

The Lime Wire defendants were represented by Colleen Bal of Wilson, Sonsini Goodrich & Rosati, Palo Alto, Calif.

Record Industry Reaction.

In an Oct. 27 press release, the Recording Industry Association of America hailed the court’s ruling:

The operators of LimeWire continue to tout how “proud” they are of their service. To be clear, for the better part of the last decade, LimeWire and its operators have violated the law, and in doing so, enriched themselves immensely. In January, the court will conduct a trial to determine the appropriate level of damages.

It’s also worth noting:  LimeWire was responsible for millions in lost sales to countless up-and-coming artists, those who already grace our earphones, and big and small music labels alike. Services that flout the law do not deserve a place in today’s music marketplace where hundreds of existing, accessible, innovative legal sites offer users their favorite music at affordable prices – sometimes even free. There are now more than 11 million legal tracks online and more than 400 licensed music services today. A few of these legal sites can be found on our website or on the music community website Music United, not to mention audio or video streaming sites like Pandora, MOG, Vevo and Rdio. In order for the legitimate marketplace to thrive, there needs to be a level playing field where illegal sites are held accountable and do not suffocate innovative, legal services whose business plans include compensating creators for their music. That’s why the recent injunction represents a significant step in the bright future of digital music.

Read the Oct. 26 injunctive order in Arista Records LLC v. Lime Wire LLC.
 


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