LimeWire Settles With Labels for $105 Million

MANHATTAN (CN) - The founder of the LimeWire file-sharing software will pay $105 million to settle a copyright lawsuit from 13 record labels, which had hoped to win $1.4 billion from a federal jury and then tried to bargain for $75 trillion.

U.S. District Judge Kimba Wood had shot down that demand as "absurd."

In a statement announcing the settlement, Mark Gorton's legal team at Willkie, Farr & Gallagher emphasized how significantly the labels had scaled back their original demands. "Quoting from Willkie's brief, Judge Wood held, 'As defendants note, plaintiffs are suggesting an award that is 'more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877,'" the firm states.

The announcement of a settlement ended a jury trial, which began on May 4, to determine how much Gorton had to pay the record labels. Judge Wood already determined a year earlier that Gorton had had violated the law by founding and heading LimeWire.

The labels called six witnesses - including Universal Music CEO Zach Horowitz and Recording Industry Association of America chairman Mitch Bainwol - over three days of trial, before both parties entered into settlement conferences for two days.

The RIAA publicly announced the settlement on Thursday with a statement from Bainwol.

"We are pleased to have reached a large monetary settlement following the court's finding that both LimeWire and its founder Mark Gorton personally liable for copyright infringement," Bainwol wrote. "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."

Gorton's attorney collected reams of the internal communications from music executives to prepare for trial, and he said in opening arguments that Bainwal's internal communications sounded quite different than his public tough talk against file-sharing software.

Bainwol said in one such memo - "Burning and Ripping [CDs] are Becoming a Greater Threat Than P2P [Peer-to-Peer]," according to Gorton's planned defense exhibits.

Settlement discussions interrupted the cross-examination of billionaire Warner Music co-owner Edgar Bronfman, Jr., who allegedly told other executives privately, "[W]e inadvertently went to war with consumers... [and] consumers won."

Courts have ruled consistently against file-sharing software companies, and new forms of P2P file-sharing tend to spring up just as quickly to replace court-shuttered companies.

Grokster, another such company, lost a Supreme Court case on June 27, 2005, in a decision that also sounded the death knell of Morpheus, Kazaa, WinMx, eDonkey, Bearshare and i2hub.

LimeWire had outlasted all of these companies by the time it folded in October 20010, and several other illegal P2P software companies currently vie to take its place.

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