The case against LimeWire was filed by the Recording Industry Association of America (RIAA) in August 2006.
Late last week, Judge Kimba Wood of the U.S. District Court in New York issued a summary judgment that the service was liable for copyright infringement, unfair competition, and contributing to copyright infringement by others.
The judge not only held LimeWire responsible for those offenses, she held its founder, Mark Gorton, personally responsible as well.
According to Harvard law professor Jonathan Zittrain, as reported in the New York Times, the ruling doesn't say that peer-to-peer file sharing is illegal in itself.
Rather, the judge found that Gorton and LimeWire knew their users were using the service to infringe copyrights and not only failed to act to stop them but even encouraged them.
For example, LimeWire features a content filter, but its default setting is Off -- while at the same time the company employs an active filter to prevent users from sharing files purchased through LimeWire.
For the effects of the decision, see Page 2.
Eric Garland, CEO of BigChampagne, a company that tracks file sharing, told the Times that the record companies would benefit from the case's publicity but that there would be few practical repercussions.
"What you shouldn't expect to see is some seismic shift in file-sharing habits as you did when Napster was shuttered," he said.
On the other hand, lawyer Michael Page, who represented Grokster in the case that led to its shutdown, told CNet, "It is obviously a fairly fatal decision for [LimeWire]."
The judge has scheduled a conference for June 1. The RIAA is considering asking for an injunction that would force LimeWire to cease operations.
The organization is also weighing damages. "We think a high-damage award would be appropriate," said RIAA general counsel Steven Marks, which could run to US$150,000 per infringed work -- in other words, many millions of dollars.
But LimeWire CEO George Searle said the company hopes to remain in business and that "LimeWire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major labels, to achieve this mission."