On May 11, 2010, the music industry won its battle against LimeWire LLC, as the court found that the company had induced multiple users of the LimeWire P2P file-sharing program to infringe the copyrights of Warner Bros Records, Sony Music Entertainment, Capitol Records and ten other labels. The litigation is now in the damage phase, with a trial on damages scheduled for May 2, 2011. The record companies are demanding damages ranging from $400 billion to an insane $7.5 trillion.
But in a 14-page opinion signed on March 10 (pdf), United States District Judge Kimba Wood labeled the record companies' damages request as "absurd" and contrary to copyright laws. Previously the plaintiffs argued that Section 504(c)(1) of the Copyright Act provided for damages for each instance of infringement where two or more parties were liable. Given that LimeWire had over 50 million users per month downloading millions of files a day, the resulting damages would be "staggering."
"As it stands now, Defendants face a damage award that 'could be in the hundreds of millions of dollars (if not over a billion dollars),'" the judge said. "Indeed, if one multiplies the maximum statutory damage award ($150,000) by approximately 10,000 post-1972 works, Defendants face a potential award of over a billion dollars in statutory damages alone. If plaintiffs were able to pursue a statutory damage theory predicated on the number of direct infringers per work, defendants' damages could reach into the trillions."
In essence, take the 50 million LimeWire users and multiply that number with the maximum statutory damage award of $150,000. The resulting number is the staggering $7.5 trillion USD. That would mean LimeWire would owe just over half of the national debt which now trickles over $14 trillion and is steadily climbing. "Absurd" is an ideal word for the music industry's demands based on those numbers.
"As defendants note, plaintiffs are suggesting an award that is 'more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877,'" Wood added. "The absurdity of this result is one of the factors that has motivated other courts to reject Plaintiffs' damages theory."
By the end of the court order, the judge declared that the thirteen record labels are entitled to a single statutory damage award from LimeWire per work infringed, regardless of how many individual users directly infringed that particular work.
"We were pleased that the judge followed both the law and the logic in reaching the conclusion that she did," said LimeWire attorney Joseph Baio of Willkie Farr & Gallagher in a statement to Law.com. "As the judge said in her opinion, when the copyright law was initiated, legislatures couldn't possibly conceive of what the world would become with the internet. As such, you couldn't use legislative history. Instead, the overarching issue is reasonableness in order to avoid absurd and possibly unconstitutional outcome."
In jest, Baio added that the total sum the record companies wanted from LimeWire would be better spent paying off the nation's debt and investing in healthcare.