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On verge of closing, P2P vendor LimeWire hopes for a settlement

RIAA accused company of contributing to massive music piracy

June 9, 2010 11:44 AM ET

Computerworld - Beleaguered file-sharing software maker LimeWire LLC said it still hopes to settle a dispute with the Recording Industry Association of America (RIAA) even as a federal court in New York appears set to shutter the company for enabling copyright infringement.

A spokeswoman for LimeWire late Tuesday said the company is "actively engaged" in working with the industry to settle the claims and to "move forward with a new way of working together that benefits all parties involved."

"LimeWire absolutely does not encourage or condone the illegal copying or sharing of copyrighted material," the spokeswoman said. LimeWire has taken steps to discourage infringement, by including a hash filter in its software that prevents copyrighted material from being illegally shared, the company said.

However, at this stage, it's doubtful whether the company's attempts to settle the dispute with the RIAA, which has long accused LimeWire of enabling massive music piracy, will have any effect.

Judge Kimba Wood of the U.S. District Court for the Southern District of New York last month found LimeWire and its chief executive Mark Gorton liable for inducing and enabling copyright infringement. Wood's ruling was in response to a motion filed by 11 recording companies accusing LimeWire of knowingly allowing and actively encouraging users of its software to indulge in massive music piracy.

In a 59-page ruling last month, Wood agreed with the recording companies and found that LimeWire had engaged in "purposeful conduct that fostered infringement, with the intent to foster such infringement." The judge upheld virtually all of the arguments presented by the recording companies in their motion and ruled that LimeWire had failed to implement in a "meaningful way" any technical barriers that would have made it harder for users of its software to illegally share and download music files.

Even LimeWire's hash filter was an optional function that could be turned off by default and had to be enabled by users for it to work, the judge had noted. In addition to finding LimeWire liable for inducement of copyright infringement, Wood also ruled that Gorton, the company's chairman and CEO, knew about the infringing use and did little to stop it.

The RIAA ratcheted up the pressure against LimeWire after the judge's ruling. In a motion filed Monday, the RIAA asked the court to freeze all assets belonging to LimeWire LLC, Lime Group and Gorton. The motion claimed the company was "liable for hundreds of millions of dollars (if not even a billion dollars) in statutory damages."

LimeWire yesterday said that at this stage in the legal process, "any predictions on damages are purely speculative."



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