Lime Wire Infringement Case Gets January Trial in New York for Damages

File-sharing website Lime Wire LLC received a January trial date for damages in a copyright infringement case brought by record companies including Warner Music Group Inc.

U.S. District Judge Kimba Wood in New York today also gave Lime Wire two weeks to file legal papers supporting its argument that it shouldn’t be shut down.

The world’s four largest music companies were seeking a permanent order from Wood shutting down Lime Wire. Wood ruled last month that the file-sharing site was liable for inducing copyright infringement by millions of users who downloaded songs for free.

“We believe it must be shut down,” Glenn Pomerantz, a lawyer for the record companies, told the judge at the hearing today.

Lawyers for Lime Group LLC and its founder Mark Gorton are fighting the labels’ attempt to add thousands more recordings to the list of those said to be infringed. The number of songs will likely determine the monetary damages, which the label’s lawyers said could reach “hundreds of millions of dollars.” The court’s ruling applied to a sample of just 30 recordings.

Increased Number

“I am likely to allow expansion of the number of recordings that will be subject to this case,” Wood said.

Lime Wire lawyers also seek a reconsideration of Wood’s summary judgment ruling.

Michael Sommer, a lawyer for Lime Wire, said in court papers that the “evidence cited by the court did not establish that Lime Group had the right and ability to supervise or actually exercised control over the conduct of Lime Wire that the court found to induce infringement by Lime Wire users.”

The labels sued in 2006, in the face of declining sales of CDs, their largest source of revenue. They include Arista Records, owned by Sony Corp.’s Sony Music Entertainment; Atlantic Recording Corp., part of Warner Music; Capitol Records, a unit of Terra Firma Capital Partners Ltd.’s EMI Group; and Vivendi SA’s Motown Record Co., a unit of Universal Music Group.

Shares of Warner Music lost 24 cents, or 4.8 percent, to $4.75 at 4:03 p.m. in New York Stock Exchange composite trading. Sony dropped 132 yen to 2,639 yen in Tokyo trading. Vivendi fell 17.5 cents to 16.94 euros in Paris. Terra Firma, based in London, doesn’t trade publicly.

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

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net.

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