As seen on IP and Technology Law360.
The latest copyright infringement decision has emerged against
LimeWire, the immensely popular file-sharing client. Judge Kimba
Wood of the U.S. District Court for the Southern District of New
York found LimeWire was liable for unfair competition, inducing
copyright infringement, and copyright infringement itself. The
decision held that LimeWire users committed a "substantial
amount of copyright infringement," and that LimeWire "has
not taken meaningful steps to mitigate infringement."
The LimeWire decision breaks new ground in the battle against
file-sharing networks. Distinguished from previous cases, Judge
Wood held that LimeWire was primarily liable for committing
copyright infringement. In the past, file-sharing networks were not
held liable for illegal activities of its users. Although some
prior decisions resulted in liability for inducing copyright
infringement, none resulted in the file-sharing network being held
liable for engaging in copyright infringement itself. This
resultant "primary" copyright liability is a much graver
offense than inducing users to commit copyright infringement.
Furthermore, Judge Wood also held Mark Gorton, founder of LimeWire,
personally liable for copyright infringement.
The LimeWire decision sets a clear tone that if file-sharing
networks are established to encourage and facilitate illegal acts,
the creators and enablers of the networks will be held accountable.
Judge Wood found that because LimeWire failed to implement a
copyrighted-material filtering mechanism, it suggested that
LimeWire was aware of, and encouraged the sharing of copyrighted
material. Therefore, LimeWire "assisted users in committing
infringement."
Soon after Judge Wood issued his decision, the Recording Industry
Association of America (RIAA) requested a permanent injunction
against LimeWire, which would shut it down until the ongoing
copyright infringement was eliminated. The RIAA brief states:
If granted, the permanent injunction would also prevent LimeWire
from advertising its services, allowing its client to be
downloaded, and collecting advertising revenue obtained. LimeWire
has yet to respond to the request for injunction. The RIAA's
request reasoned that irreparable harm stems from the fact that
LimeWire's liability likely exceeds the value of their assets.
Given that the statutory damages may rise to up to $150,000 per
work, per infringer, the RIAA's request may be well suited.
Once LimeWire responds to the request, the RIAA has two weeks to
respond to the filing, however, Judge Wood may rule anytime after
LimeWire's response has been submitted.
LimeWire has responded unofficially to the RIAA's request for
permanent injunction in an optimistic tone. A LimeWire
representative stated that the permanent injunction may "hold
back the creation of new digital music technologies." It is
likely that Judge Wood will grant a permanent injunction; however,
likely not to the extent requested by the RIAA. Similar injunction
remedies have been granted in other online infringement cases:
Grokster, Usenet.com, and Fung. In each
of those cases, an injunction was promptly issued after the summary
judgment motion was decided.
The decision may be fatal to LimeWire. Most importantly, the yet to
be determined damage award could make any hope of continued
operation futile, as LimeWire may be liable for hundreds of
millions of dollars worth of copyright infringement.
Hypothetically, LimeWire could continue operating if they addressed
the ongoing infringement. One possible course of action would be to
implement a filtering system that would distinguish between
searches directed at obtaining copyright-infringing material, and
allowing other searches aimed at legitimate content to proceed.
However, many of the current LimeWire users may abandon the service
if their filtration system was used.
LimeWire has already made attempts to become a licensed music
distributor, similar to Napster. If LimeWire could keep a mere
fraction of its approximately 50 million monthly users, such a
venture could lead to a very profitable business model. However, as
the vast majority of the content downloaded from LimeWire (RIAA
estimates it at 93%) is copyrighted, it may be unreasonable to
expect that user base to convert seamlessly into legal music
purchasers.
Despite the ultimate fate of LimeWire, the file-sharing problem
will continue. The LimeWire decision may result in a drastic
restructuring of the file-sharing networks, but it is likely that
copyrighted material will continue to be downloaded at a relentless
pace. However, the new precedent that results in liability for the
enabler, rather than the user, may slow the growth of new
file-sharing technology. For file-sharing clients having a
structure similar to that of LimeWire, the decision will most
certainly result in defeat. The RIAA will likely pursue such
file-sharing networks, and use the precedent as negotiation
leverage.
The legacy of LimeWire is tremendous, as nearly 200 million users
downloaded the client since its inception. The vast majority of
these users are accustomed to downloading their music for free. If
LimeWire ceases operation, it is unlikely that these users will
begin utilizing the available legal channels. Since Napster,
digital music has been available for illegal download by the
masses. Changing the expectations of this generation may be the
biggest challenge facing the recording industry. In the past, when
one file-sharing service was shut down, another quickly filled the
void. However, the LimeWire decision has now clearly stated that
enabling users to download known copyrighted material is inducing
infringement, and results in liability.
Already, there are many alternative channels available for users to
obtain copyrighted content, without payment. A few of the LimeWire
replacements include Freenet, Frostwire, and uTorrent. This
"next generation" of peer-to-peer servers supposedly
provides additional privacy, and prevents tracking of the download
streams to individual users. Nonetheless, although the latest
technology may provide additional protection to the end-user,
accordingly to the logic in the LimeWire decision, the creators and
operators of the file-sharing clients could be held liable for
copyright infringement.
Endless litigation may not regain loyalty of the downloading
generation. Nonetheless, the LimeWire decision cuts closer to the
epicenter of illegal music distribution by holding creators of
file-sharing networks responsible. The owners of the next
generation of file-sharing networks are now mindful that they can
be held accountable for enabling users to access copyrighted
material illegally.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.