How Limewire Works: A Basic Guide to P2P Networks
Before the lawsuit leading to the shutdown of LimeWire, the most significant court case for Limewire and all other file sharing software was the 2005 case, MGM v. Grokster. In this case, the court essentially ruled that peer-to-peer file sharing companies can be liable for its users practice of illegal sharing of copyrighted items. Before this case, file-sharing companies such as Grokster and Limewire followed the precedent set forth in the 1984 case, Sony Corp. V. Universal City Studios, which ruled that Sony as producers of the Betamax, a technology capable of illegal copying of material, were protected from copyright infringement of its users because the technology was “capable of substantial noninfringing uses.” Through this ruling, Grokster had been able to side step the Ninth Circuit Court of Appeals, which had ruled that Grokster and other peer-to-peer service Morpheus were not liable for copyright violations made by their users (EFF.org). However, the Supreme Court overruled this outcome on June 27, 2005.
This ruling called into question the future of peer-to-peer filing services, and CEO Mark Gorton considered stopping the distribution of LimeWire after the decision (Farzad). The court’s decision seemed to say that as long as peer-to-peer services did not “actively promote” infringement among its users, they were not liable. The act of promoting infringement was known as “inducement” in the court. Gorton did not believe that as long as he did not “induce” user infringement that he would be in the clear. According to Gorton, the court gave “a tool to judges that they can declare inducement whenever they want to” (Farzad).
Gorton’s uncertainty of LimeWire’s future was justified, as LimeWire was served a cease and desist notice from the Recording Industry Association of America (RIAA) only a few months after the Grokster decision on September 13, 2005. Gorton refused to adhere to the RIAA’s demands (Samuelson). Appropriately, the RIAA fired back, filing a lawsuit, which would eventually decide LimeWire’s fate almost a year after delivering the cease and desist order. Thirteen record labels: Arista, Atlantic, BMG, Capitol, Elektra, Interscope, LaFace, Motown, Priority, Sony BMG, UMG, Virgin, and Warner Bros. joined forces to file their complaint of copyright infringement on August 4, 2006. The suit claimed LimeWire is “devoted essentially the Internet piracy of recordings” and also implicated LimeWire’s inducement of its users, saying, “Defendants have continued to promote, market, and distribute LimeWire as the successor-in-infringement to these pirate services” (Arista v. LimeWire). The pirate services the plaintiffs were referring to were of course the already defunct peer-to-peer services, Grokster, Napster, and Aimster.
Though the skies were dim for LimeWire in light of the decision of MGM v. Grokster, Gorton and LimeWire fired back strong, filing a countersuit against the RIAA a little over a month after the RIAA filed its complaint with LimeWire. Gorton’s countersuit made a sweeping claim that the RIAA had essentially violated the Sherman and Clayton Antitrust Acts and had “formed an illegal cartel, conspiring to restrain trade in the market for online music distribution” (Samuelson). The language in the counterclaim was very heavy and pointed to a larger question regarding the conflict between development of all technology and content owners. The counterclaim went onto imply that the music industry at large did not want any online music distributor not in their possession or doing business with them was to be eliminated (Kawamoto).
LimeWire’s courageous and daring counterclaim would however be eventually dismissed a few years later in December 2007. United States District Judge Gerald Lynch ruled that the counterclaim “fail[ed] to allege an adverse effect on competition market-wide” (Corelis). His decision was also aided from the RIAA’s overwhelming amount of information in its defense, which included 100 GB of data or 29 million pages, while LimeWire did not present any other supporting evidence for the accusations made in its counterclaim (Corelis).