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RIAA v. Limewire: Record Labels Will Get Paid Twice For Some Downloads

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The Limewire file-sharing service was shut down last year, and the only thing left now is to figure out how much money the now-illegal service owes the record labels that first sued it back in 2006. The judge overseeing the case made two key rulings this week that strongly favor the record labels. The orders are responding to a flurry of motions filed by both sides, as Limewire and the RIAA each try to get the early edge in a trial over damages scheduled to begin May 2. The most recent order will allow the RIAA to “double-dip” and get paid twice for more than one hundred songs. For those tracks, the labels already have received small settlements from individual downloaders–but the new ruling means they can still get more damages from Limewire over the same music.

The RIAA can “double-dip” when collecting damages from Limewire. As part of a massive litigation campaign began in 2003, the RIAA sued tens of thousands of individual downloaders who used Limewire and other services. Those include relatively small settlements of several thousand dollars each for 104 songs that were downloaded by individuals from Limewire, and are also in the RIAA’s big list of tracks it wants the service to pay damages for. Defense lawyers for Limewire argued that such “double dipping” shouldn’t be allowed. Even though copyright law allows statutory damages of up to $150,000 per work, those can only be collected for each work once, the file-sharing service said. But the judge rejected that argument and RIAA lawyers will be able to get statutory damages for all infringed tracks, even ones it has already collected for from individuals.

What’s the significance? The effect on the damages in this case will be small; the ruling affects 104 tracks out of the 9,715 songs for which the RIAA wants to collect statutory damages. But it’s good precedent for the record labels, because it shows their campaign against individual downloaders won’t get in the way of pursuing lawsuits against the online services those individuals used.

The RIAA won a decisive victory over the “album v. song” issue. Copyright law allows for damages of up to $150,000 per work willfully infringed. But what’s a “work?” Limewire lawyers argued that for songs released in an album, they should only be held liable once for the whole album. But U.S. District Judge Kimba Wood ruled yesterday that for any song that was available as an individual track on iTunes–which is the overwhelming majority of the songs the RIAA is suing over–the labels are entitled to damages for each song.

What’s the significance? This is a great precedent for the labels and owners of music copyrights. iTunes has helped kill off whole-album sales by allowing consumers to just buy the tracks they want. That wasn’t great for the recorded-music business. But this ruling means that the iTunes revolution also may result in an unintended consequences–dramatically raising damages for infringing music copyrights. Going forward, it will be harder for defendants trying to limit their damages to hide behind “album only” legal precedents from the pre-iTunes era. “Many (if not most) of Plaintiffs’ sound recordings were issued and infringed on an individual basis,” wrote Wood. The fact that those sound recordings were also compiled as parts of albums does not alter this fact.”