May 12, 2011 2:56pm PT by Eriq Gardner
Record Labels Settle Massive LimeWire Copyright Lawsuit
The recording industry and LimeWire have reached a $105 million settlement that puts an end to five years of heated litigation.
The RIAA had been seeking billions of dollars in damages from LimeWire over copyright infringement on the file-sharing platform. U.S. District Court Judge Kimba Wood delivered what was essentially a death penalty for LimeWire with an injunction against the company last October.
The parties were in the midst of a jury trial to determine damages, but the settlement will put an end to that fight.
“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," said RIAA Chairman and CEO Mitch Bainwol in a statement. "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."
The Lime Group LLC was founded in 2000 by Mark Gorton, who spent years at Credit Suisse as a successful financial trader before starting his own financial services firms, Lime Brokerage and Tower Research Capital.
Gorton's Lime Group dabbled a bit in providing medical software, but was most known for its popular P2P program, LimeWire. At its height in 2007, LimeWire was found to be installed on a third of all computers worldwide, according to research by BigChampagne.
In May 2010, Judge Wood granted the plaintiffs’ motion for summary judgment, finding that LimeWire “intentionally encouraged direct infringement” by LimeWire users and that the LimeWire software was used “overwhelmingly for infringement.”
Still, the company continued to operate its file-sharing program until shortly after the October injunction.
During the aborted trial, the record industry pinned staggering losses at the feet of LimeWire, saying it contributed to a 52% decline in revenue for the industry in the past decade.
LimeWire previously settled a lawsuit brought by music publishers for a reported $11 million. It is still facing legal action by others, including a recently-filed lawsuit brought by Alki David and more than a dozen hip hop artists.
Attorneys at LimeWire are hailing the latest settlement with the RIAA as a positive.
"In the recent past, the Plaintiffs have pressed for a $75 trillion verdict," said Willkie Farr & Gallagher, the law firm representing LimeWire, in a statement. "The Court labeled that claim 'absurd.' Plaintiffs then claimed that they suffered $40 to $50 billion of damages and that Lime Wire was responsible for it all. At other times they have claimed that the amount of damages exceeded $1.4 billion...Lime Wire and its founder, Mark Gorton, are pleased that this case has concluded."