Peer-to-peer software maker LimeWire's willingness to pay a whopping $105 million to settle music piracy claims marks a decisive, if somewhat symbolic, victory for the Recording Industry Association of America (RIAA).
The proposed settlement will bring to an end another successful campaign by the music industry to stop those it contends are enabling widespread music piracy.
In recent years, the recording industry has paid what some say are enormous legal costs to fight similar battles against Napster, Grokster, Kazaa and Streamcast.
Despite the successful suits, industry experts wonder whether the effort has succeeded in slowing down online music piracy.
LimeWire said on Thursday it will pay $105 million to settle claims by 13 recording companies that its P2P file sharing software was responsible for enabling billions, and potentially even trillions of dollars in damages.
The U.S. District Court for the Southern District of New York, which heard the case, last year agreed with the RIAA's claims that LimeWire and its chairman, Mark Gorton, had enabled widespread music piracy.
The court ordered LimeWire to cease its file sharing operations last October. A jury was in the process of deciding an appropriate penalty when LimeWire made its settlement offer yesterday.
The settlement was hailed at the time by RIAA Chairman and CEO Mitch Bainwol as a "reason for celebration by the entire music community."
Ray Beckerman, a New York attorney who has defended individuals against RIAA lawsuits said the record labels have reason to feel happy. "They got LimeWire shut down, and got some money," in the process, Beckerman said.
"But what would be interesting to see is how much of the $105 million that it will get from LimeWire was eaten up by legal fees," he said. "As I see it, the big four record labels have now managed to shut down the big first generation, file sharing" services, he said.
But for the past several years it seems the more dominant file sharing protocol has been BitTorrent, which the the indistry has yet to litigate, said Beckerman who maintains a blog chronicling the recording industry's anti-piracy campaign.
The music industry "basically took what they could get" from Gorton and LimeWire, said Eric Johnson, professor of operations management at Dartmouth College's Tuck School of Business.
"The $105 million has more to do with Gorton's potential ability to pay" than with any real damages that might have been sustained by the music industry, said Johnson, who has testified before Congress several times on P2P-related security issues.
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