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Lime Wire Judge Limits Copyright Damages Labels Can Seek

April 5 (Bloomberg) -- A federal judge limited the number of recordings for which music labels can seek monetary damages in the copyright infringement case against website Lime Wire LLC.

U.S. District Judge Kimba Wood said that the record labels can’t demand statutory damages for each individual song that appears on an album, according to a filing yesterday in Manhattan. A trial for damages is set to begin May 2.

Wood found Lime Wire and its founder, Mark Gorton, liable for inducing copyright infringement last year. The LimeWire website allowed users, without authorization from copyright owners, to download recordings and share them with others on their computers. As the case has moved into the damages phase, each side is trying to increase or limit the number of recordings liable for monetary awards.

Total damages could reach hundreds of millions of dollars, according to court papers.

Music labels, including Sony Corp.’s Arista Records and Warner Music Group Corp.’s Atlantic Records, have identified 11,205 recordings that they say LimeWire users infringed, and said they’ll seek statutory damages for 9,715. Copyright law allows statutory damages of up to $150,000 per infringed work, which meant a possible liability of more than $1 billion.

Infringed Works

Wood said in her ruling that an album constitutes one infringed work. The exception to that is a track from the album released as a single recording to be sold through Apple Inc.’s iTunes or some other retailer.

In March Wood ruled that the labels were entitled to only one statutory damage award for each work infringed, regardless of how many people downloaded the recording. The labels’ demands could have meant damages of trillions of dollars, which she said was an “absurdity.”

Wood ordered the labels to submit their final list of recordings by April 15.

Lime Wire was ordered last year to shut down its music file-sharing site.

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.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net

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