LimeWire agrees to pay $105 million to record labels

LimeWire has agreed to pay record labels US$105 million to settle a lawsuit alleging that the file-sharing service allowed its users to infringe copyright, the Recording Industry Association of America (RIAA) announced late Thursday.

Thirteen record labels, in a lawsuit filed in August 2006, alleged that LimeWire was "devoted essentially to the Internet piracy" of music. Judge Kimba Wood of the U.S. District Court for the Southern District of New York ordered LimeWire to stop distributing its peer-to-peer software in October of last year.

The out-of-court settlement came after a jury trial that focused on damages to be paid by LimeWire and CEO Mark Gorton began in New York last week.

"We are pleased to have reached a large monetary settlement following the court's finding both LimeWire and its founder Mark Gorton personally liable for copyright infringement," RIAA Chairman and CEO Mitch Bainwol said in a statement. "As the court heard during the last two weeks, LimeWire wreaked enormous damage on the music community, helping contribute to thousands of lost jobs and fewer opportunities for aspiring artists."

Bainwol called the settlement a "reason for celebration by the entire music community."

The settlement reinforces the U.S. Supreme Court's ruling against P2P vendor Grokster in 2005, Bainwol added. The court ruled that Grokster and StreamCast Networks can be held liable for copyright infringement committed by users.

The settlement and the Grokster case show that "designing and operating services to profit from the theft of the world's greatest music comes with a stiff price," Bainwol said.

LimeWire's lawyer, Joseph Baio of Willkie Farr & Gallagher in New York, wasn't immediately available to comment on the settlement.

LimeWire.com's home page has a note about the injunction issued by Wood. "We further remind you that the unauthorized uploading and downloading of copyrighted works is illegal," the note said.