Arista Records LLC v. Lime Wire LLC, USDC S.D. New York, October 26, 2010

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  • Court enters a permanent injunction in a copyright infringement action brought by several record companies against Lime Wire, a provider of a peer-to-peer system used to download digital music files.

Arista Records LLC, Atlantic Recording Corporation, BMG Music, Capitol Records LLC, Elektra Entertainment Group Inc., Interscope Records, LaFace Records LLC, Motown Record Company, Priority Records, Sony Music Entertainment, UMG Recordings Inc., and Warner Bros. Records Inc. sued Lime Wire LLC, Lime Group LLC, Mark Gorton, Greg Bildson, and M.J.G. Lime Wire Family Limited Partnership, based on Lime Wire’s peer-to-peer system that was used to download digital music files. The court entered an Opinion and Order on May 11, 2010, and amended it on May 25, 2010, in which it found Lime Wire liable for inducement of copyright infringement as well as for common law copyright infringement and unfair competition as to the plaintiffs’ pre-1978 copyrighted works. Although the litigation continues, the parties consented to the entry of a permanent injunction.

The plaintiffs argued that all four of the factors used to determine whether a court should order a permanent injunction weighed in their favor: (1) that they suffered an irreparable injury; (2) that remedies available at law such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.

The permanent injunction prohibits Lime Wire from copying, reproducing, downloading, or distributing a sound recording, as well as directly or indirectly enabling or assisting any user to use the Lime Wire system to copy, reproduce or distribute any sound recording, or make available any of the copyrighted works. Lime Wire is also required to disable the file trading and distribution functionality for current and legacy users, to provide all users with a tool for uninstalling the Lime Wire software, to obtain permission from the plaintiffs before offering any new version of the software, and to encourage all legacy users to upgrade to the new version. The order also requires that if Lime Wire sells or licenses any of its assets, it must require as a condition of the transfer that the purchaser or licensee submit to the court’s jurisdiction and agree to be bound by the permanent injunction. The court will maintain jurisdiction in order to provide a final ruling on Lime Wire’s liability and damages.