Technology and Business Law Blog

Lime Wire’s Antitrust Charges Against RIAA Dismissed

The Federal courts seem to be inclined to side RIAA (Recording Industry Association of America) when it comes to p2p file sharing networks. Yesterday U.S. District Judge Gerard E. Lynch in New York ruled that Lime Group LLC failed to make its case that it has been harmed by the recording companies (RIAA’s) business practices and he granted the recording companies motion to dismiss the claims. Read here.
The background of this case is that RIAA brought a lawsuit against Lime Wire which is a file sharing applications provider in August 2006 for copyright infringement over songs distributed over the Internet without permission and claimed that this mode of sharing music was an illegal business model. Lime Wire’s defense is that they were not “actively inducing” copyright even if their software product was used for it and Lime Wire in turn filed an antitrust law suit against the recording companies stating that RIAA was trying to illegally compete with Lime Wire and other file sharing systems.

Judge Lynch concluded Lime Group didn’t show any facts to suggest the record companies’ actions were “anything other than independent decision-making by each company to refrain from doing business” with Lime Wire.

Lime Group had also contended the recording companies had fixed prices for online music, but Lynch concluded that the firm failed to establish it had been harmed by any alleged price fixing. Lynch also rejected claims by Lime Group that the record labels had engaged in unfair business practices, including hacking the firm’s file-sharing network and claiming it promotes child pornography, on the grounds that the alleged actions were not anticompetitive. The original case against Lime Wire by RIAA is still pending and it was the first piracy lawsuit brought against a distributor of file-sharing software after the U.S. Supreme Court ruled in 2005 that technology companies could be sued for copyright infringement on the grounds they encouraged customers to steal music and movies over the Internet. Read here.

It will be interesting to see how the court decides the original law suit against Lime Wire after the Federal court in the Capital Records v Jammie Thomas case held that the defendant was held guilty of copyright infringement for distributing songs over KaZaA another p2p file sharing system. Read my earlier post here.

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December 4, 2007 Posted by | Antitrust, p2p, RIAA | Leave a comment