Lime Wire File-Sharing Software Induced Copyright Infringement, Judge Says

Lime Wire LLC, a maker of software that lets people share music files on the Web, induced copyright infringement, a U.S. judge ruled in a case filed by 13 record companies.

U.S. District Judge Kimba Wood in Manhattan made the ruling in a 59-page decision dated yesterday. Capitol Records Inc., Warner Bros. Records Inc., Arista Records LLC and the 10 other companies sued in 2006, claiming users of the software were able to exchange copies of more than 3,000 of their recordings.

“The evidence establishes that LimeWire users have infringed plaintiffs’ copyrights,” Wood wrote. By distributing and maintaining the software, Lime Wire LLC “intentionally encouraged direct infringement by LimeWire users,” she said.

Wood has scheduled a June 1 conference at which she will probably set a date for a hearing on damages, said Katherine Forrest of New York’s Cravath Swaine & Moore LLP, lead counsel for the record companies. Lime Wire and its co-defendants, including Chairman Mark Gorton, could be liable for “many millions” of dollars, Forrest said.

“These folks were inducing and they were facilitating,” she said in a telephone interview.

Lime Wire Chief Executive Officer George Searle said he “strongly opposes” the court’s ruling, according to a statement issued by Linda Lipman, an outside spokeswoman for the New York-based company.

“Lime Wire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major record labels, to achieve this mission,” Searle said.

The case is Arista Records LLC v. Lime Wire LLC, 06-cv- 05936, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Andrew M. Harris in Chicago at aharris16@bloomberg.net.

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