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LimeWire agrees to $105 mil settlement

Peer-to-peer service to pay record companies for infringement

In a decisive victory against a major conduit for illegal music downloading, peer-to-peer service LimeWire and its CEO Mark Gorton agreed Thursday to a $105 million out-of-court settlement with the major record companies.

The agreement puts an abrupt end to the damages phase of LimeWire’s copyright infringement trial, which began May 3 in New York federal court.

Settlement represents a fraction of what the labels could have been awarded at trial, since they were seeking maximum statutory damages of $150,000 per infringing act.

On Wednesday, the court heard testimony from Warner Music Group chairman/CEO Edgar Bronfman, Jr., who said LimeWire had a devastating impact on the industry.

LimeWire joins Grokster and Kazaa among the peer-to-peer services chased out of business by recording industry litigation.

RIAA chairman/CEO Mitch Bainwol hailed the settlement agreement.

“The resolution of this case is another milestone in the continuing evolution of online music to a legitimate marketplace that appropriately rewards creators,” he said.Last May, Judge Wood found that LimeWire encouraged copyright infringement. In October, Wood — who had called the firm “a tool of choice for rampant infringement” in an injunction order — told the service to disable its peer-to-peer downloading service.

Thursday’s settlement is the second major financial blow to LimeWire and Gorton: In March, a copyright infringement suit lodged last year by eight major music publishing firms — the four majors’ pubberies and four independents — against the company was also settled out of court for an undisclosed amount.