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Record Companies Reach Multi-Million Dollar Settlement with Lime Wire

NEW YORK - (Mealey's) Cautioning that "theft of the world's greatest music comes with a stiff price," Recording Industry Association of America (RIAA) Chairman and CEO Mitch Bainwol confirmed May 12 that a settlement has been reached in the high-profile copyright infringement case against Lime Wire (Arista Records LLC, et al. v. Lime Group LLC, et al., No. 06-5936, S.D. N.Y.). 

According to reports, the defendant peer-to-peer (P2P) website and its founder, Mark Gorton, will pay the RIAA and its members $105 million; Bainwol, in a press release, said only that the parties agreed to a "large monetary settlement." 

A trial on the issue of damages was under way before U.S. Judge Kimba Wood of the Southern District of New York. 

In August 2006, 13 plaintiff record labels, including Arista Records LLC, BMG Music, Motown Records Co. and Interscope Records, sued Lime Wire and its parent company Lime Group (Lime Wire, collectively) for "massive and daily infringement" of their copyrighted works by Internet users via the LimeWire P2P software.  Gorton was also named as a defendant. 

In a May 2010 ruling, Judge Wood issued summary judgment on the plaintiffs' claims of secondary copyright infringement, finding that Lime Wire induced the widespread infringement perpetrated by its users.  In an October consent judgment, Judge Wood ordered the shutdown of Lime Wire's operations via a permanent injunction, leaving only the issue of damages for trial.   

In court filings, the plaintiffs initially indicated that they would seek $75 trillion from Lime Wire but Judge Wood later rejected the sum.  On the eve of trial, after the judge narrowed the number of infringed songs the plaintiffs could seek to recover on, the plaintiffs were poised to make as much as $1.5 billion - the statutory maximum, pursuant to the Copyright Act. 

[Editor's Note:  Full coverage will be in the May 16 issue of Mealey's Litigation Report: Intellectual Property.  For all of your legal news needs, please visit] 

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