Indie Labels Want Millions From LimeWire

     MANHATTAN (CN) - When LimeWire paid major record labels $105 million in May for facilitating music piracy, it promised to pay independent labels their share too, but now it's given them the back of the hand, a company that claims to represent 12,000 indie labels says in Federal Court.
     Merlin BV, a Netherlands-based nonprofit, sued LimeWire for copyright infringement.
     Merlin says it represents more than 12,000 independent record companies that produce, manufacture, sell, license and distribute music for indie darlings such as Tom Waits, Arcade Fire, Vampire Weekend, Spoon and Grizzly Bear, among others.
     In 2006, a group of major music labels - including Arista Records, Universal Music Group, Sony Music, Warner Music Group and EMI Music - sued LimeWire for copyright violations.
     Merlin says it agreed not to file a similar lawsuit on behalf of the independent labels, because in 2008 LimeWire signed an agreement promising to extend to Merlin the terms of whatever settlement it reached with the major labels.
     In May 2010, U.S. District Judge Kimba Wood shut down LimeWire after finding that it facilitated "massive" music piracy with its peer-to-peer software program and file-sharing network. As part of the settlement, LimeWire agreed to pay the major labels $105 million.
     Merlin says it didn't find out about the settlement until a year later.
     Merlin says LimeWire then denied it had offered similar settlement terms to the independent labels, and claimed it had no duty to pay Merlin at all.
     Merlin demands more than $5 million.
     It is represented by Donald Zakarin and Frank Scibilia with Pryor Cashman.