By the end of 2010 the situation changed somewhat when LimeWire was forced to cease its operations after a U.S. federal judge granted an injunction in favor of the RIAA.

According to the ruling LimeWire “intentionally encouraged infringement,” its software was used “overwhelmingly for infringement” and the company was aware of 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.

The record labels then went after the company for damages and settled for a record-breaking $150 million.

This big win prompted Twentieth Century Fox, Viacom, Comedy Partners, Disney, Paramount Pictures and Warner Bros. to launch a separate lawsuit last year. The movie outfits accused LimeWire of infringing the copyrights of approximately 2,000 of their videos and demanded several hundred million dollars in damages.

In addition, the studios requested a ruling in their favor because they feared that LimeWire could launch a similarly infringing platform in the future, through which their copyrights may be infringed.

Over the past few months the two parties have been battling in court but without much progress being made. Last week the movie studios dismissed the entire case with prejudice, meaning that the case is effectively over.

It’s unclear why the case was dropped, but one possibility is that the case required more resources than the studios were prepared to commit. The studios hoped that a new trial on several key issues wasn’t required as the RIAA already did much of the groundwork.

However, LimeWire objected to the motion for summary judgment and wanted to treat the case as distinct from the RIAA ruling. The software maker argued that they operated differently in the 2009 / 2010 period the studios claim the infringements were committed, and said that the RIAA case only applied to musical works, not video.

While the dismissal is good news for LimeWire, vulture’s keep circling over the company.

Early last month LimeWire was sued by the independent music publisher Microhits, who also demand millions in damages. Microhits appears to have a preference for defunct file-sharing services as it also sued Megaupload last year, a case that’s still pending.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

An alleged leader of LulzSec is said to have helped the FBI with the investigation.

According to a Foxnews report the 28-year old Hector Xavier Monsegur had been working as an informant after he was secretly arrested last year.

“They caught him and he was secretly arrested and now works for the FBI,” Foxnews heard from a source.

Monsegur, better known as “Sabu” online previously worked for the LimeWire but lost his job when the popular file-sharing application was shutdown by the RIAA.

It would be no surprise if the connection between “Sabu” and LimeWire will be quoted by copyright groups to show that there’s a link between file-sharing and organized crime.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

BitTorrent aside, some file-sharers have turned to so-called YouTube-downloaders – software and services that rip music from YouTube videos and convert them to carry-anywhere MP3s. Needless to say, the recording labels don’t like these either.

Unfortunately YouTube videos carry low-bitrate audio and for many the quality just doesn’t come up to scratch, but there is another YouTube-like service that doesn’t have that problem. Grooveshark carries a huge range of high-quality user-uploaded music ready for web-based streaming. However, in common with its video-focused counterpart, Grooveshark doesn’t permit downloading of MP3s. Not as standard at least.

Enter Groovejaar, a brand new piece of open source music downloading software that essentially takes Grooveshark and turns it into LimeWire, but with super-fast downloads, great quality MP3s – and absolutely no malware.

The software itself is small at just 1.4mb and requires Java to run. A few seconds later and Groovejaar is downloaded, installed and ready to go.

As can be seen from the screenshot below, we immediately searched for music by file-sharing favorite Dan Bull, but the other feature illustrated is “Get Top Songs” which shows Grooveshark’s most-popular tracks of the day or month.

Groovejaar is very easy to use and has just a few user settings to contend with. The most important initially is to set a hard drive location where music can be downloaded to. After that users can entertain themselves with different skins and an option for multiple simultaneous downloads. Users can also pull in their own playlists from external sites.

But perhaps the burning question is this – is it legal?

To discover that we should perhaps consider Grooveshark’s legal status first. Generally the RIAA has a problem with Grooveshark – they say that the service is unlicensed and the implication is that this means it’s illegal. Grooveshark disagree.

“So let’s set the record straight: there is nothing illegal about what Grooveshark offers to consumers,” said Senior VP of Information Products at Grooveshark, Paul Geller, earlier this year.

“Laws come from Congress. Licenses come from businesses,” he explained. “Grooveshark is completely legal because we comply with the laws passed by Congress, but we are not licensed by every label (yet).”

Geller noted that as long as Grooveshark is DMCA-compliant and responds appropriately to takedown requests, the service is legal under US law. In effect, Grooveshark is just like YouTube, only without the videos. Someone complains about user-uploaded content on either site, it gets taken down.

Groovejaar doesn’t carry any of its own content, it’s all carried by Grooveshark, so its creator is physically unable to comply with any takedown requests. The ‘Get Top Songs’ feature may indeed pull up a lot of unlicensed content, but those lists are maintained by Grooveshark. In this sense the Groovejaar client is ‘dumb’ and content agnostic.

Some might argue that because it provides downloads rather than streaming then somehow the legalities change. This is often a controversial point but really it shouldn’t be. Whether it’s a video ‘streamed’ from YouTube or a track ‘streamed’ from Grooveshark, it still gets downloaded to the user’s computer. The only difference is the length of time it stays there.

The situation can be summed up as follows. Watching infringing content on YouTube is comparable to doing the same on Grooveshark. It might still be illegal, but people are never sued for watching or listening to unauthorized content on YouTube and they won’t be sued for doing the same with Grooveshark or Groovejaar. Not least because they’re impossible to track legally.

If the copyright holders don’t want their stuff on either service, it is their responsibility to take it down. That’s the way it works.

Finally, for Firefox fans there is another way of downloading MP3s from Grooveshark. The Groove Shredder plugin works nicely but rather than being a stand-alone app it embeds itself in the Grooveshark website.

Groovejaar can be downloaded here and Groove Shredder here.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Merrill, who was Chief Information Officer and Vice President of Engineering at Google, left the search giant in 2008 after being poached by EMI, a key member label of the RIAA.

At EMI he took up the impressive position of Chief Operating Officer of New Music and President of Digital Business, despite admitting this week that he knew the music industry was “collapsing”.

“The RIAA said it isn’t that we are making bad music, but the ‘dirty file sharing guys’ are the problem,” he said during his speech as quoted by ComputerWorld.

“Going to sue customers for file sharing is like trying to sell soap by throwing dirt on your customers.”

But those “dirty file-sharing guys” had an even dirtier secret. During his stint at EMI, Merrill profiled the behavior of LimeWire users and discovered something rather interesting. Those same file-sharing “thieves” were also iTunes’ biggest spenders.

“That’s not theft, that’s try-before-you-buy marketing and we weren’t even paying for it… so it makes sense to sue them,” Merrill said, while undoubtedly rolling his eyes.

That same “try-before-you-buy” discovery was echoed in another study we reported on last week which found that users of pirate sites, including the recently-busted Kino.to, buy more DVDs, visit the cinema more often and on average spend more at the box office than their ‘honest’ counterparts.

Merrill’s words yesterday are not the only pragmatic file-sharing related comments he’s made in recent years. Almost immediately after his 2008 EMI appointment, he made comments which didn’t necessarily tow the company line.

“For example, there’s a set of data that shows that file sharing is actually good for artists. Not bad for artists. So maybe we shouldn’t be stopping it all the time. I don’t know,” Merrill said.

“Obviously, there is piracy that is quite destructive but again I think the data shows that in some cases file sharing might be okay. What we need to do is understand when is it good, when it is not good…Suing fans doesn’t feel like a winning strategy,” he concluded.

Less than a year later, Merrill was forced out by EMI.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Limewire agreed to pay $105 million to compensate the major music labels for damages suffered but allegedly agreed to settle with some Indie labels too. To date the labels say they haven’t received a penny, a situation they intend to remedy through the courts.

The labels are being represented by Netherlands-based Merlin BV, an umbrella organization which protects the rights of its members in 25 countries, representing up to 30% of global music sales.

On July 13th, Merlin filed a “Breach of Contract” lawsuit at the New York Southern District Court against Lime Wire LLC, Lime Group LLC and company owner Mark Gorton.

According to the complaint, in 2008 Merlin agreed not to sue LimeWire, opting to let the RIAA case against the file-sharing service run its course instead. In return, LimeWire is said to have agreed that in the event it settled with the RIAA (it did, for $105m) then Merlin would get a comparable cash payment, adjusted to account for its smaller market share.

But no payment has been forthcoming and having run out of patience Merlin wants its share of the LimeWire spoils, a minimum of $5 million. Merlin is being represented by lawfirm Pryor Cashman.

Separately, last week Attorney General Douglas F. Gansler announced that his Consumer Protection Division had resolved an investigation into the LimeWire software following allegations that some of its users had inadvertently shared personal documents online.

LimeWire accepted responsibility and under the terms of its settlement posted a notice on its homepage warning users of the software that sensitive information may have leaked and that LimeWire should be uninstalled.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

“The CBS Defendants have been the main distributor of LimeWire software and have promoted this and other P2P systems in order to directly profit from wide-scale copyright infringement. Internet users have downloaded more then [sic] 220 million copies from Defendants’ website, found at Download.com, since 2008,” the original complaint read.

The complaint further noted that Download.com is still promoting various other P2P-applications which the majority of people use to infringe copyrights. By promoting this software in return for money and by showing users how to download, the CBS defendants are willingly contributing to copyright infringement, the plaintiffs claimed.

FilmOn’s Alki David, the driving force behind the suit who himself was sued by CBS Interactive for copyright infringement, seemed determined to put up a fight. Nonetheless, the suing parties decided to voluntarily dismiss the case yesterday, as Wired reports.

On the surface this appears to be good news for CNET and the other defendants, but the opposite is true. As it turns out many copyright holders have approached Alki David with a request to be added to the lawsuit.

“Since the time of the filing of the original Complaint by plaintiffs in this case, numerous artists and other copyright owners have approached plaintiff Alki David about potentially joining this lawsuit as plaintiffs,” the plaintiff’s attorney’s write to the District Court judge.

“As a result, the current plaintiffs intend to amend and are in the process of working to amend this suit to add further plaintiffs and additional copyrighted works,” the notice adds.

Since it takes quite a bit of time to add the new parties and potentially thousands of copyrighted works to the complaint, the plaintiffs decided to dismiss the current case for now. They expect to file a broader complaint on behalf of many more copyright holders in the near future.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Today the news breaks that FrostWire will also leave the Gnutella network, an announcement that could be seen as the final nail in Gnutella’s coffin. Unable to cope with this increasingly spam-ridden network, Frostwire’s upcoming 5.0 release will be a BitTorrent-only affair.

“We decided to go all out with BitTorrent and spend our time making FrostWire the best BitTorrent client out there, and not fighting the endless spam battle. There are many opportunities to take in the realm of legal file-sharing and social networking that you will see happen as FrostWire 5 keeps evolving,” the FrostWire team told TorrentFreak.

When FrostWire was first released in 2004 it was nearly identical to its big brother LimeWire, using the Gnutella network to share files. In 2006 FrostWire first added BitTorrent support, but the client’s core user base continued to mainly use the Gnutella network.

However, in recent months spam took control over the Gnutella network, and the FrostWire team eventually decided to focus entirely on BitTorrent.

“The team decided to listen to what’s happening in the p2p world and to make FrostWire a great BitTorrent client that makes BitTorrent easy to use,” FrostWire states. “The Gnutella Protocol is an amazing piece of technology, but one which the team is no longer interested in or capable of developing further.”

With the upcoming release of FrostWire 5 its users will only be able to download files via BitTorrent. As can be seen in the screenshot above, users don’t have to leave the client as all search results are presented within FrostWire. In the latest beta build the search results come from various BitTorrent sites including isoHunt and BTJunkie.

By presenting the search results in FrostWire most users won’t have much trouble adapting to the massive underlying changes. On the other hand, for the existing BitTorrent community it means that a few million ForstWire users will be added to their swarms, which is generally a good thing.

With its large user base FrostWire will become one of the most-used BitTorrent clients once most of its users move over to the upcoming 5.0 release. For Gnutella, however, the future is looking more and more bleak. Although there are still a few Gnutella-based clients out there, its unclear how long they will remain usable.

For those developers who appreciate a challenge, the latest version of the Gnutella-based FrostWire client is available at the BitBucket repository.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

“The CBS Defendants have been the main distributor of LimeWire software and have promoted this and other P2P systems in order to directly profit from wide-scale copyright infringement. Internet users have downloaded more then [sic] 220 million copies from Defendants’ website, found at Download.com, since 2008,” the complaint reads.

As the case moves on some interesting arguments are appearing on the table. One of the most controversial items overlooked thus far concerns current Warner Music director and CNET co-founder Shelby Bonnie. Believe it or not, Bonnie served on the board of directors at Warner Music and was also the CEO of CNET, all at the time LimeWire was being sued.

As The Music Void points out, Bonnie was invited to join the Warner Music board in November 2005, just 4 months after the landmark Grokster ruling. At that time Bonnie was still CNET’s CEO, a position he gave up during the fall of 2006. After that, he continued to serve on CNET’s board of directors until March 2007.

Since it’s no secret that CNET made a healthy profit from the millions of LimeWire clients that were downloaded from its site every month, this could lead to the awkward conclusion that a prominent Warner Music director profited from piracy.

While it should be noted that LimeWire hadn’t been convicted of doing anything illegal at the time, it is quite unusual that the CEO of LimeWire’s main distribution platform was simultaneously a director of one of the record labels going after LimeWire in court (and launching numerous individual file-sharers).

It would definitely be interesting to hear the thoughts of the former CNET CEO on the issue, should he be called as a witness. Perhaps Bonnie opted to keep the healthy revenue stream alive until the court banned it, despite the massive losses Warner Music was claiming?

Whatever the case, the above must have been the topic of some heated discussions at the Warner Music board of directors. After all, it wouldn’t really be far-fetched to compare it to a Universal Pictures director who also serves on the board of The Pirate Bay’s hosting company.

Indeed, that would be quite unbelievable.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Others, such as Kazaa, eDonkey, iMesh and Bearshare, enjoyed great success but were slaughtered and/or reanimated into friendly forms by the international recording industry. But it was the 2005 United States Supreme Court decision in MGM Studios v Grokster which drew an important line in the sand.

That hugely complicated case underlined an important message – don’t create a product and promote it for infringing uses.

As we’ve seen from the recent dismantling of LimeWire, that lesson still eludes some and almost unbelievably it’s still being repeated today. What am I talking about? File-sharing client marketing.

A few weeks ago TorrentFreak learned that Cydia, the alternative market place for iPhone apps, were taking a harsh line on file-sharing software. We aren’t talking about an Apple-style blanket-ban on anything with the word ‘torrent’ in the title, but what appears to be an analysis by Saurik, Cydia’s owner, of what might be deemed illegal.

We know of at least two developers who have had their quite decent apps kicked out by Cydia, a victim of their apparent “one strike and you’re out” policy. But it appears that the apps were excluded not due to their functionality, but because of marketing missteps.

Paraphrasing one developer’s marketing blurb, the suggestion was that the app was great, not only for legal downloads but for “not so legal” downloads too. It’s just a few words but they clearly make all the difference.

Another coder, who made a suite of what look like perfectly nice apps for accessing various torrent sites and managing downloads, threw in some beautiful screen shots of the software in action. Whether those TV show download listings in among the nondescript stuff were intentional or not is impossible to say. Nevertheless, the outcome wasn’t good.

As is often the case, TorrentFreak recently received an email from a company promoting a new Mac torrent client, which came with a nice little promotional video. The video demo showed the shiny new client in action – downloading a discography of a very famous mainstream label singer. This, from a company who has clearly invested quite a lot of cash into their products. Why take this kind of chance?

Then just a couple of weeks ago an informative news article was published which mentioned the growing use of mobile apps. In it a respectable developer admitted that his app was mainly used for downloading TV shows. If that app goes huge in the future, what kind of damage would a confession like that cause? Following in the steps of LimeWire is great for a while but it ultimately ends in years of sleepless nights and $100m+ in damages.

There are some brilliant minds out there, coding some awesome applications and while some of them will wither and die, others will go on to greatness and bring the creator the satisfaction dreamed about during those long nights with just a screen, a bucket of coffee and a table lamp for company.

OK, not all software creators or indeed site operators care about or even need to abide by US laws due to their mindset or geographic location. They have chosen their path, are comfortable with it, and are doing what they do best. They are aware that their troubles will grow in parallel with their successes and they will morph, outmaneuver, hide or give the finger to their adversaries – that is their prerogative.

But for those who are positively out of the shadows and actively courting the US and increasingly the European markets, behaving today in a way in which one wouldn’t mind being judged by tomorrow might prove incredibly valuable. And make no mistake, that judgment standard is getting tougher every year.

That said, the good news for software devs is that maintaining respectability (for want of a better word) doesn’t devalue a product in any way, indeed it adds value. And it costs absolutely nothing, just a pause for thought.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

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.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.