LimeWire hit with $105 million in damages in RIAA lawsuit

The copyright infringement lawsuit brought against LimeWire by major record companies has reportedly been settled to the tune of $105 million.  The suit was originally filed in 2006, accusing LimeWire of being a website “devoted to piracy” by allowing users to upload and download whatever content they pleased without permission from rights-holders.  

A Manhattan district court judge ruled last year that LimeWire was liable for copyright infringement, with the now-settled trial being a follow up to determine damages.  This is the second major win against LimeWire this year, the first coming in March of 2011 when LimeWire settled a suit brought by 30 music publishers.

LimeWire hit with 5 million in damages in RIAA lawsuit

The record labels involved in this suit identified over 9,000 recordings created within the last 40 years, all which had been traded on LimeWire without the permission of the labels or artists.  The damages being sought per song were listed as up to $150,000, bringing the potential damages total up to a whopping $1.4 billion.

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Mark Gorton, the wealthy founder of LimeWire, was also ruled to be personally liable for the damages set in this trial. His lawyers argued that file-sharing was not the only factor contributing to declining record sales and the decreased number of music industry jobs.  Gorton’s lawyers presented documents, originally filed by Warner Music with the Securities and Exchange Commission, demonstrating that the CEO of Warner Music Edgar Bronfman Jr. made $1 million in base salary and $6 million in bonus money in each of the last five years.  During 2008 Bronfman made almost $17 million in total compensation while Warner Music was hit with layoffs.

In other documents produced by Gorton’s lawyers, Bronfman had made statements about other forces besides illegal file-sharing impacting record sales.  Bronfman discusses competition for entertainment money with video games, the decline of record stores, and even CD counterfeiting as reasons for the difficulties seen by the music industry in recent years. LimeWire’s lawyers also argued that record labels were severely impacted by their reluctance to react to the Internet and online file-sharing, producing a 2007 speech by Bronfman to back their claim.

Bronfman said “We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection, and file-sharing was exploding. And of course we were wrong. How were we wrong? By standing still or moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find, and as a result, of course, consumers won.”

With this case settled Gorton expressed relief today stating he was “pleased that this case has concluded.” The RIAA’s chairman called the settlement “reason for celebration by the entire music community, its fans and the legal services that play by the rules.”

This could be the end of the LimeWire saga, unless other industry groups take up the reins and sue them yet again.

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