In papers filed this week in federal court, lawyers for the record labels said LimeWire founder Mark Gorton had moved a big number of the Lime Group's assets (90 percent of LimeWire's ownership stakes) to an entity he hopes will be shielded from the lawsuit. They quickly tried to have the assets frozen.
With damages that could top $1 billion, you can see why the fear is there.
The recording labels moved last week for a permanent injunction to stop LimeWire, obviously not aware of the technology that drives LimeWire (but still feeling fully confident in their ability to represent the recording labels). LimeWire can be no more be stopped than the ocean can be drained.
LimeWire is driven by the Gnutella network, which turns every person with LimeWire software into a little mini LimeWire server. There is no central system to shut down, only a decentralized system in which each person is a LimeWire 'node.'
This means the labels haven't sued the people responsible for the network. That would be each person with LimeWire software. Oooops! How much did you pay that law firm to represent you?
Meanwhile, LimeWire is looking for a new legal firm to represent them as well.
"We will continue to stay focused on the development of our new music service and ensure that the company continues business as usual. We were looking for a better firm," said a spokesperson for the company.
A U.S. judge ruled last month that LimeWire induced copyright infringement with their P2P file sharing software, in a lawsuit filed by 13 record labels. Warner Bros, Arista, Capitol Records and more claimed that LimeWire users were able to exchange copies of more than 3,000 of their copyrighted recordings.
The ruling was made against LimeWire by U.S. District Judge Kimba Wood in Manhattan, and the lawsuit was originally filed back in 2006. She decided that LimeWire and Mark Gorton had committed copyright infringement, engaged in unfair competition and induced users to commit copyright infringement with the software.
"The evidence demonstrates that LimeWire optimized LimeWire's features to ensure that users can download digital recordings, the majority of which are protected by copyright, and that LimeWire assisted users in committing infringement," she wrote in a 59 page ruling. She also cited a copyright infringement cas against Grokster as part of the basis for her ruling.
LimeWire came to fame as another one of those P2P (peer-to-peer) file sharing programs based on the Gnutella network, that allowed users to download music, movies and more for free. Later they also joined up with BitTorrent. They were sued in 2006 by an RIAA umbrella group; a month later, LimeWire countersued, citing antitrust violations.
Arista, Atlantic, BMG Music, Capital, Elektra, Interscope, LaFace, Motown, Priority, Sony BMG, UMG, Virgin and Warner Brothers are the full list of companies that sued Lime Group, the makers of the LimeWire P2P software.