Limewire Lawsuit

Limewire Lawsuit - The Basics

First, a basic run down of the players in the Limewire Lawsuit. The suit is officially called Arista versus Limewire, but other labels, like Sony BMG and Virgin are named as plaintiffs in the case. The labels are seeking compensatory damages as well as punitive damages against the Limewire Corporation of at least $150,000 per song traded using Limewire’s software. The case was filed in a District of New York court in August, 2006. Additional labels have until January 31, 2007, to join the case against Limewire. As yet, there is no date scheduled to hear the case, though a list of expert witnesses must be submitted to the court by May 16, 2007, and all depositions are due into the court by July 13, 2007.

Limewire has filed a countersuit against the record labels, alleging that the labels resorted to illegal business practices to intimidate potential Limewire customers.

What’s It Really All About?

The Limewire lawsuit is one in a long line of cases brought by record labels and the RIAA (Recording Industry Association of America) have brought against everyone from software manufacturers to music playing device manufacturers to private citizens who use these products. Record labels are downright terrified that new technology will rob them of their profits by allowing users to distribute songs as many times as they like, free of charge. The music industry managed to bring down the original free file sharing program, Napster, and forced them to change their business model so that the labels profited from songs distributed by Napster. Other companies like Bearshare, WinMX, and most recently, Kazaa, have followed suit, either folding or clamping down on the sharing of copyright protected files.

The recording industry also has managed to force Microsoft and Apple to pay a percentage of the profit from each sale of the Microsoft Zune and iPod to a music industry kitty, to be distributed among the major labels. MP3 Players are considered by many in the industry to be nothing more than “a vessel for stolen music” so MP3 manufacturers who do not pay a portion of their profits to the record industry often become targets of costly lawsuits by the recording industry.

Who’s Right?

Well, that’s a matter of perspective. We’ve been here before, though. When home recordable cassettes first become available, the recording industry panicked, and shouted from the roof tops that “home taping kills music.” Eventually, a deal was worked out between cassette manufacturers and the industry that a penny from each blank cassette sold would go into the industry pot. Sound familiar? Ditto when recordable CD-Rs became available. The major labels are hard at work developing CDs that will only play in your player, downloads that can only be listened to X number of times and so on.

But is Limewire, and companies like them, stealing profits from record companies, as alleged in the Limewire lawsuit? Record company profits are down, to be sure. How much of that is due to file sharing and how much of that is due to a decrease in the quality of the music being offered by labels is open to debate. A UNC/Harvard University study found that the effect of file sharing on music sales was exactly zero. Many music fans say they are more than willing to pay their favorite bands for the music they create, but they’re sick of buying albums with one hit song and 20 filler songs. The real question here might be for the major record labels to take a look at their business models and ask themselves if throwing a bunch of money at an artist with one song for a big wave of exposure that goes bust in month is more important than long term artist development.

Also interesting to note is that major labels, not indie labels, are suffering profit losses and suing the Limewires of the world. And only major labels, not indie labels, share in the profits from sales of MP3 players, blank cassettes, and CD-Rs.

What Do You Think?

Share your thoughts on the Limewire lawsuit by leaving us a comment at the bottom of the page. Stay tuned to LTK Music for all of the latest Limewire lawsuit developments.