On October 26th 2010, the rogue P2P service LimeWire was shutdown. Thirteen separate record companies – all represented by the Recording Industry Association of America (RIAA) – sued for mass copyright infringement.
Limewire argued that granting its users access to copyrighted files was not technically the same thing as infringing copyrights, and declared that it was not responsible for the actions of others. In turn, the RIAA made its case by selecting 1,800 files at random from the LimeWire database, and finding that 93% of them were copyright protected, i.e. not authorized for free distribution.
The court observed that LimeWire had actively “induced” its users to infringe its copyrighted material. After Napster, received a court-ordered injunction for copyright infringement in February 2001, LimeWire’s marketing team developed a plan to quickly acquire all of Napster’s previous users. LimeWire representatives traveled to college campuses where Napster was popular to promote their new file-sharing service for music downloads. They utilized Google AdWords to direct any searches related to Napster, Kazaa, and Morpheus – all of which were found guilty of copyright infringement – to the LimeWire site. Finally, when users downloaded the software, they were asked if they would use LimeWire for copyright infringement. If the user answered yes, they were given the option to go back and select no for the software to load properly. The company attracted a dedicated user base rapidly, and at the time of the LimeWire vs. RIAA court hearing, the service had a steady 4 million users per day and made up to $20 million per year through ad space and premium users.
The district judge on the case, Kimba Wood of New York, considered these factors and determined –without need for trial- that LimeWire was actively attracting users and encouraging them to download copyrighted material. On May 12th, 2010, Wood officially ruled in favor of the RIAA and set a court date for January 2011 to determine the monetary sum of LimeWire’s damages.
In addition, the ruling also held the company’s founder and president, Mark Gorton, personally liable for the infringements. Copyright law clearly states that individuals involved with an infringing corporation can be held personally responsible for their actions, but the RIAA’s approach to this issue, and the redress it sought on this count, were perceived as unusual and controversial Although there are no official figures at this time, the RIAA’s requested damages are $150,000 per violation – the maximum that copyright law will allow. Of course, the Association will have to settle for considerably less based on what LimeWire’s ability to pay is.
After the favorable RIAA ruling, it went all downhill for LimeWire. Just one month later, the National Music Publishers Association (NMPA) sued LimeWire again—and also for mass copyright infringement. By October 26th 2010, Wood ordered LimeWire’s services to be shut down permanently to prevent any further copyright infringement.
As a result of the injunction, LimeWire laid off 30% of its employees. Shutting down its services, however, proved to be a complicated undertaking. The service operated on a decentralized system called the Gnutella Network, which LimeWire did not have direct control over. Within a week of the injunction, a pirate version of LimeWire surfaced on the Internet. This version was free of adware and spyware, so it operated even faster, and it offered LimeWire’s typical premium features without charge. LimeWire denied any affiliation with the pirate version, and posted the following statement to their website:
“LimeWire is under a court order dated October 26, 2010 to stop distributing the LimeWire software…LimeWire LLC, its directors and officers, are taking all steps to comply with the injunction. We have very recently become aware of applications on the Internet purporting to use the LimeWire name, such as the LimeWire Pirate Edition. We demand that all persons using the LimeWire software, name, or trademark in order to upload or download copyrighted works in any manner cease and desist from doing so. We further remind you that the unauthorized uploading and downloading of copyrighted works is illegal.”
The pirate version was not the only form of retaliation against LimeWire’s injunction. A pro-piracy group known as “Anonymous” launched an attack known as “Operation Payback.” They shut down the RIAA website through DDoS, a denial-of-service attack, just as they had done in the past with the website of the Motion Picture Association of America (mpaa.org). Although the RIAA site is back to full service, it was a major inconvenience to fix and it caused a large uproar in the anti-piracy community.
One might expect LimeWire to succumb to the recent bedlam surrounding its name. The company, however, has unusual plans for the future. Despite the injunction and its impending punitive damage charges, LimeWire has set its sights on launching a legal cloud-based streaming service. It is questionable as to where LimeWire expects to receive its licensing deals from– as it doesn’t exactly have the best relationships with the RIAA or the NMPA. But LimeWire executives are quite serious about the matter. Similar to Napster’s shift to a legal streaming service, LimeWire hopes to keep its brand name alive. This alleged cloud-based service would sync to the user’s iTunes library, so that the user could access their iTunes library from any computer or smart phone.
Overall, what does this case against LimeWire mean for the future of the music industry? It is hardly a victory against peer-to-peer file-sharing services. With so many similar options available on the Internet, illegal downloaders are likely to move on to RapidShare, BitTorrent, FrostWire, or any of the other numerous sites currently available online. LimeWire existed for ten long years before being shut down, and it is likely that these other services will defy litigation for similar amount of time. For instance, RapidShare was already taken to court this summer by Capelight Pictures for distributing their copyrighted films as free downloads. Capelight argued that a copyright filtering system needed to be placed upon their service, but RapidShare successfully appealed the motion.
Ultimately, the LimeWire court case seems to show that punitive legal action bears some fruit. But it may never be enough to frighten new market entrants that leverage free music for their benefit.
By Nick Susi
 Music & Copyright – May 19, 2010
 Digital Music News Blog – May 12, 2010
 Music & Copyright – May 19, 2010
Music & Copyright – November 4, 2010
Digital Music News Blog – October 26, 2010
Digital Music News Blog – November 9, 2010
Digital Music News Blog – November 1, 2010
Digital Music News Blog – June 20, 2010
Music & Copyright – July 28, 2010