LimeWire to Record Industry: File-Sharing is Good for You!

LimeWire points to documents turned over so far that indicate the benefit of file-sharing. LimeWire wants more.

The $1 billion legal case against LimeWire is turning into the modern day equivalent of the story of the judgment of King Solomon -- the tale of the Hebrew leader who told two women fighting over a baby to cut the child in half in order to determine which of the women really wanted to save the baby's life. Similarly, U.S. District Judge Kimba Wood has been tasked with figuring out who has the best interests of the music industry at heart -- record labels or the allegedly villainous P2P service LimeWire -- in the midst of scorched earth litigation that's brimming with intrigue.

In recent months, we've reported that LimeWire, having been found guilty of copyright infringement by a federal judge, has been attempting to battle back some $1 billion in damage claims from record labels. To that end, LimeWire has been insisting that the record companies prove actual damages and produce information on costs such as royalty payments. The file-sharing company, which shut down after a judge's order, has also been creating havoc all over the new media universe, subpoenaing internal documents from Amazon, Apple, Yahoo, Google, MySpace, and a host of other companies. who have vigorously objected to such demands.

The mammoth discovery process is ongoing, and has mostly been conducted under seal, but so far, multiple terabytes of data from e-mails have been collected, and plaintiffs have already turned over a quarter million pages of e-mails, and 22,000 pages of third-party research on the impact of peer-to-peer file sharing on the music industry.

The result so far?

In declarations to the court, LimeWire says the evidence shows that user downloads actually increased record industry revenues and therefore the subsequent shutdown of LimeWire has decreased those revenues. In other words, piracy is good.

Still, on the path towards a May 3rd trial date, it wants more and more evidence -- and has motioned for such material despite the kicking and screaming of the labels. Lime Wire is also seeking to show that it wanted to be a legitimate service and had reached out to record labels but found itself "blacklisted" despite good faith efforts to work out a licensing deal.

It's Judge Wood's job to deal with this paperwork madness and despite acknowledging a "potentially tenuous connection of the evidence sought to the damages inquiry at issue," she's been crafting her own Solomon-type decisions in an attempt at satisfying both parties. Previously, she blessed a magistrate judge's ruling whereby both sides would pick 100 works each believes to be representative of the damage that file-sharing has or hasn't had on the music business. Now she's ordered that LimeWire may search the record industry's internal communications for reference to LimeWire. But only five custodians of such internal documents from a group of forty-three.

LimeWire isn't getting everything it wants.

Probably to the relief of Google and the gang, Judge Wood on Wednesday reversed a decision by the magistrate judge that ordered non-party licensees to produce any communications relating to their relationship with record labels and/or concerning LimeWire. 

"The burden posed by Defendants’ discovery demands on these non-parties greatly outweighs any likely benefit Defendants would receive from the production," ruled Judge Wood.

Notwithstanding the order, the coming May trial should be very revelatory.

Eriq Gardner can be reached at and can be followed on Twitter.