18-05-10

Lime Wire Liable for Copyright Infringement The US software company Lime Wire, well-known for its eponymous file-sharing application, has been found liable for copyright infringement in the US. In Arista Records (and others) v Lime Group LLC (and Mark Gorton, Director) [2010] 06 CV 5936-KMW (reported 11 May 2010), a US District Court in New York granted summary judgment against Lime Wire (as well as against its chairman personally), finding them each liable for "inducement of copyright infringement" and common law copyright infringement, of thirteen major record companies' content. The program "LimeWire" uses peer-to-peer technology to permit the sharing of digital files via the Internet-based network known as the "Gnutella network". Once downloaded to a PC, Users can locate and download files stored on other users' computers. The software has been downloaded millions of times, including 3 million downloads during its first year and, according to press reports, an astonishing 340,000 times during last week's hearing. In a summary judgment, the Court threw out Lime Wire's technical objections to the labels' evidence, and instead detailed each of the infringement claims. After establishing that Lime Wire's users had infringed the record companies' copyrights on a large-scale basis, the Court found that Lime Wire was liable for secondary infringement - based largely on the 2005 US Supreme Court decision in Grokster. in which "inducement" was defined as "engaging in purposeful conduct that encouraged copyright infringement with intent to encourage such infringement". In support of its findings, the Court noted Lime Wire's "awareness of substantial infringement by its users" as shown in internal emails. In Lime Wire's 2006 "Conversion Plan" designed to "convert" users from sharing unlicensed content into customers of its then-newly-licensed download store, Lime Wire put in writing that 25% of its users were "hardcore pirates", 25% were "morally persuadable", 20% were "legally aware" and 30% were "samplers and convenience users". Worse still for Lime Wire, the company's employees maintained a file labelled "Knowledge of Infringement" containing a collection of mainstream articles about "widespread infringing activities through LimeWire". The Court also found that Lime Wire had failed to mitigate the adverse effects of its users' infringement - by not implementing any "technological barriers" or "design choices" such as "hash-filtering" (i.e. automatic analysis of content to enable filtering and blocking), "acoustic finger-printing", "filtering based on other digital metadata" and "aggressive user education". Even the electronic notice to users stating that "Lime Wire [is] for sharing authorised files only … Downloading [the] program does not constitute a licence for obtaining or distributing unauthorised content" and other warnings and statements of intent were found "on their own to not constitute meaningful efforts to mitigate infringement". As an interesting aside, whilst the Court found Lime Wire liable for inducement of copyright infringement, it also noted that "Google's activities do not meet the 'inducement' test explained in Grokster because Google has not promoted the use of its search engine specifically to infringe copyrights". This case, coming hot on the heels of Newzbin (see here) and the Digital Economy Act (not to mention Pirate Bay), seems to show a reversal of legal fortunes for the piracy-battered content industries. Whilst we have yet to see what level of damages awards and/or injunctions will result from this non-appealable judgment, it is hard to see how Lime Wire could survive such a massive blow. On the other hand, it is unclear how anyone could technically stop the millions of already-downloaded LimeWire programs from still being used for file-sharing for many years to come - and it is equally difficult to imagine that no new file-sharing company will rise from these legal ashes, as LimeWire rose from the original Napster ten years ago. This was an important battle for the rightsholders to win but the war is not over. The full text of the judgment may be accessed via: www.loeb.com/files/Publication/831e0d54-e44d-4df8-8e53-024...20Lime%20Group%20SDNY.pdf
Article by Tom Frederikse