The music industry's contention that file-sharing software maker LimeWire owes it trillions of dollars in damages for enabling the illegal distribution of 11,000 copyrighted songs is "absurd," a federal judge has ruled.
In a scathing ruling filed earlier this month, Judge Kimba Wood of the U.S. District Court for the Southern District of New York flatly rejected the industry's claims that LimeWire should pay up to $150,000 for each download of some 11,000 songs included in the RIAA lawsuit.
The plaintiffs' position on statutory damages "offends the canon that we should avoid endorsing statutory interpretations that would lead to absurd results," Judge Wood wrote in a 14-page ruling. "If Plaintiffs were able to pursue a statutory damage theory based on the number of direct infringers per work, Defendants' damages could reach into the trillions."
Judge Wood last October had ordered LimeWire to cease its file-sharing operations after agreeing with the music industry's claims that the company was enabling and inducing massive copyright infringement.
The Recording Industry Association of America (RIAA) filed a lawsuit on behalf of several music labels some four years ago, claiming that the music industry had lost millions of dollars because LimeWire's P2P software allowed users to easily download and distribute copyrighted songs for free,
Since the RIAA's victory last fall, the two sides have been wrangling over how much money LimeWire owes recording companies.
In her ruling this month, Judge Wood noted that this is the first time a court has been asked to consider the issue of whether a copyright holder can claim multiple awards for one copyrighted work.
The RIAA had contends that LimeWire enabled potentially thousands and even millions of people to illegally download one or more of the 11,000 songs. As a result, the association said its members are entitled to statutory damages for every single illegal download.
An award based on the RIAA calculations would amount to "more money than the entire music industry has made since Edison's invention of the phonograph in 1877," Woodsaid in her ruling. The 'absurdity' of such a result requires the court to reject the music industry's argument, she added.
The judge pointedly noted that even the RIAA had not used such an argument until last September -- or more than three years after it had first filed the lawsuit. The court will permit the RIAA to seek one statutory award for each infringed song, Wood said.
Ray Beckerman, a New York lawyer who has represented individuals in RIAA music piracy lawsuits, said Judge Wood's decision is not surprising considering what he called the RIAA's "ridiculous argument."
"The RIAA's argument was totally absurd, and contrary to the statute," Beckerman said. "Even the RIAA had never made that argument until late in the case. If I were Judge Wood, I would have ordered them to show cause why they should not have been sanctioned for making [such] a frivolous argument."
Jennifer Pariser, senior vice president of litigation and legal affairs at the RIAA, said via email that the industry "respectfully" disagrees with Judge Wood's decision.
"We are confident there are more than plenty of works in this case that will constitute significant damages," Pariser said. "Even the recent P2P report from NPD strongly reinforces the massive damages caused by LimeWire as the largest illegal P2P service. Its shuttering was a major step forward for artists and music creators who work tirelessly to bring us the world's greatest music."
Pariser was referring to a report from market research group NPD showing that music sharing via P2P tools has declined precipitously since LimeWire was shuttered. The NPD report was released this week.
Judge Wood's ruling though is likely to be of little comfort to LimeWire, which still faces statutory fines of up to $150,000 per violation. Even the court has said the total could exceed $1 billion.
The company's ability to pay such is another question, experts note.
LimeWire is not the first maker of peer-to-peer file sharing software to be held liable for contributing to copyright infringement.
In 2005, P2P software vendor Grokster was forced out of business after a U.S. Supreme Court ruling that held the company liable for copyright infringements committed by users of its software.
Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan , or subscribe to Jaikumar's RSS feed . His e-mail address is firstname.lastname@example.org .
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