Siding with the record labels, a federal judge has ruled that the peer-to-peer company LimeWire is liable for infringement because it induced users to download copyrighted material.
U.S. District Court Judge Kimba Wood in New York found "overwhelming evidence" that LimeWire "engaged in purposeful conduct that fostered infringement." Wood also ruled that LimeWire's founder, Mark Gorton, was liable for infringement.
The Recording Industry Association of America CEO Mitch Bainwol called the ruling "an extraordinary victory for the entire creative community."
In her order granting summary judgment to the record labels against LimeWire, Wood wrote that LimeWire made efforts to attract users who would download music unlawfully, enabled and assisted that activity and depended on infringement "for the success of its business."
Wood's 59-page opinion referred extensively to a report by Richard Waterman, a statistics expert hired by the record industry. Waterman concluded that 98.8% of files that users attempted to download through LimeWire were either under copyright or likely to be under copyright.
Wood also cited LimeWire documents that outlined a plan to convert infringers into customers of an online music store, showing that the company knew about piracy on the site. Among other statements, the plan said that "25% of LimeWire's users were 'hardcore pirates,' " according to the opinion.
Wood has not yet assessed monetary damages in the case, but the copyright statute provides for a minimum of $750 and a maximum of $150,000 per infringement. The next court date is scheduled for June 1.
The decision against LimeWire follows a string of victories by entertainment companies against peer-to-peer services dating back to 2001, when the courts shut down the original Napster. Four years later, the U.S. Supreme Court ruled that peer-to-peer company Grokster infringed copyright by inducing piracy. In 2008, a federal judge ordered peer-to-peer company TorrentSpy to pay $110 million damages to the Motion Picture Association of America after finding that the site destroyed evidence relevant to the MPAA's copyright infringement lawsuit. And last December, a federal judge decided that BitTorrent search engine IsoHunt infringed copyright by intentionally encouraging piracy.