Arista Records LLC v. Lime Group LLC
Encyclopedia
Arista Records LLC v. Lime Group LLC, 715 F. Supp. 2d 481
(2010), is a United States district court
case in which the Southern District of New York
held that Lime Group LLC, the defendant, induced copyright infringement
with its peer-to-peer file sharing
software, LimeWire
. The court issued a permanent injunction to shut it down. The lawsuit is a part of a larger campaign against piracy by the Recording Industry Association of America
(RIAA).
LimeWire is a program that uses peer-to-peer
(P2P) file sharing
technology, which permits users to share digital files via an Internet-based network known as Gnutella
, most of which were MP3
files containing copyright
ed audio recordings. An expert report
presented during the trial found, in a random sample of files available on LimeWire, that 93% were protected by copyright. These files were distributed, published, and copied by LimeWire users without authorization from the copyright owners, potentially competing with the recording companies' own sale of the music.
Thirteen major recording companies led by Arista Records
The thirteen consisted of Arista Records LLC, Atlantic Recording Corporation, BMG Music, Capitol Records Inc., Elektra Entertainment Group Inc., Interscope Records, LaFace Records LLC, Motown Record Company, L.P., Priority Records LLC, Sony BMG Music Entertainment, UMG Recordings Inc., Virgin Records America Inc., and Warner Bros. Records Inc. sued LimeWire LLC, Lime Group LLC, Mark Gorton
, Greg Bildson, and M.J.G. LimeWire Family Limited Partnership for copyright infringement. LimeWire filed antitrust
counterclaim
s against the plaintiff
s and ancillary counterclaims for conspiracy in restraint of trade, deceptive trade practices, and tortious interference with prospective business relations, all dismissed by the court in 2007.
The recording companies alleged that the software is used to obtain and share unauthorized copies, and that LimeWire facilitated this copyright infringement by distributing and maintaining the software. They claimed that LimeWire was liable for:
granted the RIAA's motion for summary judgment
, finding LimeWire liable for inducement of copyright infringement, common law copyright
infringement and unfair competition
as to the plaintiffs’ pre-1978 copyrighted works. The court amended its opinion and court order
on 25 May 2010.
Because all persons and corporations who participate in, exercise control over or benefit from an infringement are jointly and severally liable as copyright infringers, all claims of copyright infringement were equally applicable against Lime Group LLC and Mark Gorton
, as sole executive director
. The claims against Bildson, a former employee, were dropped in exchange for providing factual information about LimeWire and payment of a settlement. The court did not settle the fraudulent conveyance
claim against M.J.G. LimeWire Family Limited Partnership
under summary judgment, due to a genuine issue of fact.
, which may be imposed on a party that has not directly infringed a copyright, but has nonetheless played a significant role. A party that distributes infringement-enabling products or services may facilitate direct infringement on a massive scale, making effective enforcement for the copyright owner illusory.
The court established the prerequiste of direct infringement, supported by expert testimony which estimated that 98.8% of the files requested for download through LimeWire were copyright-protected and not authorized for free distribution.
in 2005 in MGM Studios, Inc. v. Grokster, Ltd.
, the court found overwhelming evidence of LimeWire's purposeful conduct fostered infringement. It established intent to encourage infringement by distributing LimeWire through the following factors:
The court said that LimeWire's electronic notice asking users to affirm that they were not using it for copyright infringement, did not constitute any meaningful effort to mitigate infringement. In 2006, LimeWire had implemented an optional hash-based filter capable of identifying a digital file with copyrighted content and blocking a user from downloading the file, but the court did not consider this a sufficient barrier. It found inducement, noting that failure to utilize existing technology to create meaningful barriers against infringement is a strong indicator of intent.
brief was submitted by the Electronic Frontier Foundation
and a coalition of consumers and industryThe Electronic Frontier Foundation was joined on the amicus curiae brief by the Center for Democracy and Technology, the Computer and Communications Industry Association, the Consumer Electronics Association, the Home Recording Rights Coalition, the Information Technology Association of America, Public Knowledge, the Special Libraries Association, and the U.S. Internet Industry Association. urging the court to apply the law in a manner that would not chill technological innovation. In particular, the brief urged the court to preserve the "Sony Betamax" doctrine developed in Sony Corp. of America v. Universal City Studios, Inc.
, which protects developers of technologies capable of substantial noninfringing uses from contributory infringement liability. The court declined to rule on this point of law because the case lacked enough facts to determine whether or not the software was actually capable of substantial noninfringing uses.
occurs when a defendant profits from direct infringement, yet declines to stop it. The court found substantial evidence that LimeWire had the right and ability to limit the use of its product for infringing purposes, including by implementing filtering, denying access, and by supervising and regulating users, none of which were exercised. Furthermore, the court found that LimeWire possessed a direct financial interest in the infringing activity, that its revenue was based on advertising and increased sales of LimeWire Pro, both consequences of its ability to attract infringing users. The court denied LimeWire's motion.
: direct infringement, purposeful conduct, and intent. The court found these established on the previously introduced evidence and granted summary judgment to the RIAA. The unfair competition
claim was also granted because they had had to compete with LimeWare's free and unauthorized reproduction and distribution of plaintiffs' copyrighted recordings.
period, strikes as to a declaration from a former LimeWire employee, and objections based on relevance, authentication and hearsay
. The court found all the evidentiary objections without merit and denied the motions; it did place certain conditions on plaintiffs' future interaction with a specific former LimeWire employee.
and agree to be bound by the permanent injunction.
Following the permanent injunction, the website www.limewire.com was effectively shut down and displays a notice to that effect. LimeWire also shut down its online store.
The court has maintained jurisdiction
in order to provide a final ruling on LimeWire’s liability and damages to determine the appropriate level necessary to compensate the record companies.
brought quotes from both parties disagreeing on the impact of the decision.
The RIAA issued a press release urging previous LimeWire users to begin using one of the available legitimate options. The New York Times also ran a story about Gorton. The case furthermore resulted in another lawsuit from National Music Publishers Association
in order for them to be included in any future settlement negotiations and damages. Finally, there is ongoing interest in what previous LimeWire users will do now and where they will go – and if BitTorrent will continue to be their next move. A LimeWire Pirate Edition
has emerged since the permanent injunction, which LimeWire itself claim to not be responsible for.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(2010), is a United States district court
United States district court
The United States district courts are the general trial courts of the United States federal court system. Both civil and criminal cases are filed in the district court, which is a court of law, equity, and admiralty. There is a United States bankruptcy court associated with each United States...
case in which the Southern District of New York
United States District Court for the Southern District of New York
The United States District Court for the Southern District of New York is a federal district court. Appeals from the Southern District of New York are taken to the United States Court of Appeals for the Second Circuit The United States District Court for the Southern District of New York (in case...
held that Lime Group LLC, the defendant, induced copyright infringement
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
with its peer-to-peer file sharing
Peer-to-peer file sharing
P2P or Peer-to-peer file sharing allows users to download files such as music, movies, and games using a P2P software client that searches for other connected computers. The "peers" are computer systems connected to each other through internet. Thus, the only requirements for a computer to join...
software, LimeWire
LimeWire
LimeWire is a free peer-to-peer file sharing client program that runs on Windows, Mac OS X, Linux, and other operating systems supported by the Java software platform. LimeWire uses the gnutella network as well as the BitTorrent protocol. A free software version and a purchasable "enhanced"...
. The court issued a permanent injunction to shut it down. The lawsuit is a part of a larger campaign against piracy by the Recording Industry Association of America
Recording Industry Association of America
The Recording Industry Association of America is a trade organization that represents the recording industry distributors in the United States...
(RIAA).
Background
LimeWire LLC was founded in June 2000 and released its software program, LimeWire, the following August. LimeWire was widely used; in 2006, when the lawsuit was filed, it had almost 4 million users per day.LimeWire is a program that uses peer-to-peer
Peer-to-peer
Peer-to-peer computing or networking is a distributed application architecture that partitions tasks or workloads among peers. Peers are equally privileged, equipotent participants in the application...
(P2P) file sharing
File sharing
File sharing is the practice of distributing or providing access to digitally stored information, such as computer programs, multimedia , documents, or electronic books. It may be implemented through a variety of ways...
technology, which permits users to share digital files via an Internet-based network known as Gnutella
Gnutella
Gnutella is a large peer-to-peer network which, at the time of its creation, was the first decentralized peer-to-peer network of its kind, leading to other, later networks adopting the model...
, most of which were MP3
MP3
MPEG-1 or MPEG-2 Audio Layer III, more commonly referred to as MP3, is a patented digital audio encoding format using a form of lossy data compression...
files containing copyright
Copyright
Copyright is a legal concept, enacted by most governments, giving the creator of an original work exclusive rights to it, usually for a limited time...
ed audio recordings. An expert report
Expert report
An expert report is a study written by one or more experts that states findings and offers opinions.In law, expert reports are generated by expert witnesses offering their opinions on points of controversy in a legal case, and are typically sponsored by one side or the other in a litigation in...
presented during the trial found, in a random sample of files available on LimeWire, that 93% were protected by copyright. These files were distributed, published, and copied by LimeWire users without authorization from the copyright owners, potentially competing with the recording companies' own sale of the music.
Thirteen major recording companies led by Arista Records
Arista Records
Arista was an American record label. It was a wholly owned subsidiary of Sony Music Entertainment and operated under the RCA Music Group. The label was founded in 1974 by Clive Davis, who formerly worked for CBS Records...
The thirteen consisted of Arista Records LLC, Atlantic Recording Corporation, BMG Music, Capitol Records Inc., Elektra Entertainment Group Inc., Interscope Records, LaFace Records LLC, Motown Record Company, L.P., Priority Records LLC, Sony BMG Music Entertainment, UMG Recordings Inc., Virgin Records America Inc., and Warner Bros. Records Inc. sued LimeWire LLC, Lime Group LLC, Mark Gorton
Mark Gorton
Mark Howard Gorton is the creator of LimeWire, a peer-to-peer file sharing client for the Java Platform, and chief executive of the Lime Group...
, Greg Bildson, and M.J.G. LimeWire Family Limited Partnership for copyright infringement. LimeWire filed antitrust
Antitrust
The United States antitrust law is a body of laws that prohibits anti-competitive behavior and unfair business practices. Antitrust laws are intended to encourage competition in the marketplace. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both,...
counterclaim
Counterclaim
In civil procedure, a party's claim is a counterclaim if the defending party has previously made a claim against the claiming party.Examples of counterclaims include:...
s against the plaintiff
Plaintiff
A plaintiff , also known as a claimant or complainant, is the term used in some jurisdictions for the party who initiates a lawsuit before a court...
s and ancillary counterclaims for conspiracy in restraint of trade, deceptive trade practices, and tortious interference with prospective business relations, all dismissed by the court in 2007.
The recording companies alleged that the software is used to obtain and share unauthorized copies, and that LimeWire facilitated this copyright infringement by distributing and maintaining the software. They claimed that LimeWire was liable for:
- inducement of copyright infringement
- contributory copyright infringement
- vicarious copyright infringementVicarious liabilityVicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability...
- violations of state common lawCommon lawCommon law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
prohibiting copyright infringement and unfair competitionUnfair competitionUnfair competition in a sense means that the competitors compete on unequal terms, because favourable or disadvantageous conditions are applied to some competitors but not to others; or that the actions of some competitors actively harm the position of others with respect to their ability to...
Opinion of the court
On 11 May 2010, Judge Kimba WoodKimba Wood
Kimba Maureen Wood is a United States federal judge for the United States District Court for the Southern District of New York.-Early life and education:...
granted the RIAA's motion for summary judgment
Summary judgment
In law, a summary judgment is a determination made by a court without a full trial. Such a judgment may be issued as to the merits of an entire case, or of specific issues in that case....
, finding LimeWire liable for inducement of copyright infringement, common law copyright
Common law copyright
Common law copyright is the legal doctrine which contends that copyright is a natural right and creators are therefore entitled to the same protections anyone would be in regard to tangible and real property...
infringement and unfair competition
Unfair competition
Unfair competition in a sense means that the competitors compete on unequal terms, because favourable or disadvantageous conditions are applied to some competitors but not to others; or that the actions of some competitors actively harm the position of others with respect to their ability to...
as to the plaintiffs’ pre-1978 copyrighted works. The court amended its opinion and court order
Court order
A court order is an official proclamation by a judge that defines the legal relationships between the parties to a hearing, a trial, an appeal or other court proceedings. Such ruling requires or authorizes the carrying out of certain steps by one or more parties to a case...
on 25 May 2010.
Because all persons and corporations who participate in, exercise control over or benefit from an infringement are jointly and severally liable as copyright infringers, all claims of copyright infringement were equally applicable against Lime Group LLC and Mark Gorton
Mark Gorton
Mark Howard Gorton is the creator of LimeWire, a peer-to-peer file sharing client for the Java Platform, and chief executive of the Lime Group...
, as sole executive director
Executive director
Executive director is a term sometimes applied to the chief executive officer or managing director of an organization, company, or corporation. It is widely used in North American non-profit organizations, though in recent decades many U.S. nonprofits have adopted the title "President/CEO"...
. The claims against Bildson, a former employee, were dropped in exchange for providing factual information about LimeWire and payment of a settlement. The court did not settle the fraudulent conveyance
Fraudulent conveyance
A fraudulent conveyance, or fraudulent transfer, is a civil cause of action. It arises in debtor/creditor relations, particularly with reference to insolvent debtors. The cause of action is typically brought by creditors or by bankruptcy trustees...
claim against M.J.G. LimeWire Family Limited Partnership
Limited partnership
A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners , there are one or more limited partners . It is a partnership in which only one partner is required to be a general partner.The GPs are, in all major respects,...
under summary judgment, due to a genuine issue of fact.
Secondary liability
The RIAA based their infringement claims on theories of secondary liabilitySecondary liability
Secondary liability, or indirect infringement, arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party. The US has statutorily codified secondary liability rules for trademarks and patents; however,...
, which may be imposed on a party that has not directly infringed a copyright, but has nonetheless played a significant role. A party that distributes infringement-enabling products or services may facilitate direct infringement on a massive scale, making effective enforcement for the copyright owner illusory.
The court established the prerequiste of direct infringement, supported by expert testimony which estimated that 98.8% of the files requested for download through LimeWire were copyright-protected and not authorized for free distribution.
Inducement
To establish a claim for inducement, the RIAA had to show that LimeWire, by distributing and maintaining LimeWire, engaged in purposeful conduct that encouraged copyright infringement with intent to do so. Applying the inducement doctrine as announced by the Supreme CourtSupreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
in 2005 in MGM Studios, Inc. v. Grokster, Ltd.
MGM Studios, Inc. v. Grokster, Ltd.
MGM Studios, Inc. v. Grokster, Ltd. 545 U.S. 913 is a United States Supreme Court decision in which the Court unanimously held that defendant P2P file sharing companies Grokster and Streamcast could be sued for inducing copyright infringement for acts taken in the course of marketing file sharing...
, the court found overwhelming evidence of LimeWire's purposeful conduct fostered infringement. It established intent to encourage infringement by distributing LimeWire through the following factors:
- LimeWire's awareness of substantial infringement by users;
- its efforts to attract infringing users;
- its efforts to enable and assist users to commit infringement;
- its dependence on infringing use for the success of its business; and
- its failure to mitigate infringing activities.
The court said that LimeWire's electronic notice asking users to affirm that they were not using it for copyright infringement, did not constitute any meaningful effort to mitigate infringement. In 2006, LimeWire had implemented an optional hash-based filter capable of identifying a digital file with copyrighted content and blocking a user from downloading the file, but the court did not consider this a sufficient barrier. It found inducement, noting that failure to utilize existing technology to create meaningful barriers against infringement is a strong indicator of intent.
Contributory copyright infringement
The parties also cross-moved for summary judgment on the claim that LimeWire was secondarily liable for contributory copyright infringement because it materially contributed to the infringement committed by users. Unlike an inducement claim, a claim for contributory infringement does not require a show of intent, rather it must show that the defendant 1) had actual or constructive knowledge of the activity, and 2) encouraged or assisted others' infringement or provided machinery or goods that facilitated infringement. A joint amicus curiaeAmicus curiae
An amicus curiae is someone, not a party to a case, who volunteers to offer information to assist a court in deciding a matter before it...
brief was submitted by the Electronic Frontier Foundation
Electronic Frontier Foundation
The Electronic Frontier Foundation is an international non-profit digital rights advocacy and legal organization based in the United States...
and a coalition of consumers and industryThe Electronic Frontier Foundation was joined on the amicus curiae brief by the Center for Democracy and Technology, the Computer and Communications Industry Association, the Consumer Electronics Association, the Home Recording Rights Coalition, the Information Technology Association of America, Public Knowledge, the Special Libraries Association, and the U.S. Internet Industry Association. urging the court to apply the law in a manner that would not chill technological innovation. In particular, the brief urged the court to preserve the "Sony Betamax" doctrine developed in Sony Corp. of America v. Universal City Studios, Inc.
Sony Corp. of America v. Universal City Studios, Inc.
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 , also known as the "Betamax case", is a decision by the Supreme Court of the United States which ruled that the making of individual copies of complete television shows for purposes of time-shifting does not constitute copyright...
, which protects developers of technologies capable of substantial noninfringing uses from contributory infringement liability. The court declined to rule on this point of law because the case lacked enough facts to determine whether or not the software was actually capable of substantial noninfringing uses.
Vicarious copyright infringement
LimeWire also moved for summary judgment on the claim that it was vicariously liable for copyright infringement. Vicarious liabilityVicarious liability
Vicarious liability is a form of strict, secondary liability that arises under the common law doctrine of agency – respondeat superior – the responsibility of the superior for the acts of their subordinate, or, in a broader sense, the responsibility of any third party that had the "right, ability...
occurs when a defendant profits from direct infringement, yet declines to stop it. The court found substantial evidence that LimeWire had the right and ability to limit the use of its product for infringing purposes, including by implementing filtering, denying access, and by supervising and regulating users, none of which were exercised. Furthermore, the court found that LimeWire possessed a direct financial interest in the infringing activity, that its revenue was based on advertising and increased sales of LimeWire Pro, both consequences of its ability to attract infringing users. The court denied LimeWire's motion.
Common law copyright infringement and unfair competition
The parties cross-moved for summary judgment on the claim of common law copyright infringement and unfair competition. The claim was included because federal copyright law does not cover sound recordings made prior to 1972. The elements for finding inducement for copyright infringement are, as under federal lawFederal law
Federal law is the body of law created by the federal government of a country. A federal government is formed when a group of political units, such as states or provinces join together in a federation, surrendering their individual sovereignty and many powers to the central government while...
: direct infringement, purposeful conduct, and intent. The court found these established on the previously introduced evidence and granted summary judgment to the RIAA. The unfair competition
Unfair competition
Unfair competition in a sense means that the competitors compete on unequal terms, because favourable or disadvantageous conditions are applied to some competitors but not to others; or that the actions of some competitors actively harm the position of others with respect to their ability to...
claim was also granted because they had had to compete with LimeWare's free and unauthorized reproduction and distribution of plaintiffs' copyrighted recordings.
Evidentiary motions
LimeWire filed a number of motions challenging the admissibility of evidence submitted by the RIAA.Motions included objections as to the reliability of one expert opinion, the properness of another, failure to identify individuals as witnesses, exclusion as to exhibits purportedly relating to settlement negotiations, exclusion of evidence of conduct outside of limitationStatute of limitations
A statute of limitations is an enactment in a common law legal system that sets the maximum time after an event that legal proceedings based on that event may be initiated...
period, strikes as to a declaration from a former LimeWire employee, and objections based on relevance, authentication and hearsay
Hearsay in United States law
Hearsay is the legal term for testimony in a court proceeding where the witness does not have direct knowledge of the fact asserted, but knows it only from being told by someone. In general the witness will make a statement such as, "Sally told me Tom was in town," as opposed to "I saw Tom in...
. The court found all the evidentiary objections without merit and denied the motions; it did place certain conditions on plaintiffs' future interaction with a specific former LimeWire employee.
Permanent injunction
Although the litigation continues, the parties consented to a permanent injunction on 26 October 2010 shutting down the LimeWire file-sharing service. The permanent injunction prohibits LimeWire from copying, reproducing, downloading, or distributing a sound recording, as well as directly or indirectly enabling or assisting any user to use the LimeWire system to copy, reproduce or distribute any sound recording, or make available any of the copyrighted works. LimeWire was also required to disable the file trading and distribution functionality for current and legacy users, to provide all users with a tool to uninstall the software, to obtain permission from the plaintiffs before offering any new version of the software, and to encourage all legacy users from upgrading. The court order also required that if LimeWire sells or licenses any of its assets, as a condition of the transfer, it must require the purchaser or licensee to submit to the court’s jurisdictionJurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
and agree to be bound by the permanent injunction.
Following the permanent injunction, the website www.limewire.com was effectively shut down and displays a notice to that effect. LimeWire also shut down its online store.
The court has maintained jurisdiction
Jurisdiction
Jurisdiction is the practical authority granted to a formally constituted legal body or to a political leader to deal with and make pronouncements on legal matters and, by implication, to administer justice within a defined area of responsibility...
in order to provide a final ruling on LimeWire’s liability and damages to determine the appropriate level necessary to compensate the record companies.
Reactions
One law and technology blog called the decision a "smackdown" for LimeWire, a second, "Judge slaps Lime Wire with permanent injunction", while The New York TimesThe New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
brought quotes from both parties disagreeing on the impact of the decision.
The RIAA issued a press release urging previous LimeWire users to begin using one of the available legitimate options. The New York Times also ran a story about Gorton. The case furthermore resulted in another lawsuit from National Music Publishers Association
National Music Publishers Association
The National Music Publishers Association is the trade association representing American music publishers and their songwriting partners. The NMPA’s mandate is to protect and advance the interests of music publishers and songwriters in matters relating to the domestic and global protection of...
in order for them to be included in any future settlement negotiations and damages. Finally, there is ongoing interest in what previous LimeWire users will do now and where they will go – and if BitTorrent will continue to be their next move. A LimeWire Pirate Edition
LimeWire Pirate Edition
LimeWire Pirate Edition is a resurrected version of the LimeWire software. LPE is the same as the LimeWire Pro software, but without the adware, advertising, and backdoors present in LimeWire. The Ask toolbar integration was also removed along with dependencies to LimeWire servers and remote...
has emerged since the permanent injunction, which LimeWire itself claim to not be responsible for.
External links
- Court case on docket Justitia.com
- LimeWire information official website
- Rule 56. Summary Judgment Cornell University Law School. Retrieved 10 March 2011