In the midst of their jury trial, the company behind the defunct LimeWire client and the RIAA settled their dispute out of court. Limewire will pay $105 million to compensate the major music labels for damages suffered. A moment of justice for the music industry, but not necessarily for the artists. The recouped money is destined for reinvestment in new anti-piracy efforts and will not be used to compensate any artists.
According to the injunction that shut down LimeWire last year, the company “intentionally encouraged infringement,” its software was used “overwhelmingly for infringement” and the company knew about the “substantial infringement being committed” by LimeWire users.
The evidence further showed that LimeWire marketed its application to Napster users and that its business model depended on mass copyright infringements.
Following the injunction LimeWire immediately disabled its file-sharing client, but the trouble for the company was far from over. Record labels and music publishers kept chasing LimeWire demanding compensation for the losses they claim the file-sharing service operator had caused.
The labels calculated that the company behind the popular file-sharing client owed them up to a billion dollars, and they filed a claim to collect it.
Last week, a New York federal jury trial started, but before this came to an end the two parties agreed to settle the case for $105 million. The RIAA brought in 9,715 tracks as evidence, which means that the amount translates to $10,808 per track instead of the maximum $150,000 the jury could have awarded.
The labels are obviously pleased with the outcome of the case. They’ve successfully argued that LimeWire caused both them and their artists significant losses.
“The resolution of this case is another milestone in the continuing evolution of online music to a legitimate marketplace that appropriately rewards creators,” RIAA Chairman Mitch Bainwol said in a comment.
Too bad, however, that the RIAA isn’t sharing any of the ‘damages’ with the artists, to reward them. Despite presenting thousands of artists as victims in the case, none of them are expected to see any of the settlement money in their bank accounts anytime soon.
RIAA spokesman Jonathan Lamy previously told TorrentFreak that the ‘damages’ accrued from piracy-related lawsuits will not go to any of the artists, but towards funding more anti-piracy campaigns. “Any funds recouped are re-invested into our ongoing education and anti-piracy programs,” he said.
Thus far the RIAA has not announced officially how the LimeWire settlement will be spent, but we don’t expect them to steer away from their previous course. This makes today’s decision on compensation a victory for the major labels, but certainly not one for musicians.