Record Labels Sue LimeWire for Enabling Music File-Sharing

Some of the world's biggest record labels sued the makers of the file-sharing program LimeWire on Friday, saying the software allows users to download music without paying for it.

The complaint, filed in Manhattan federal court, is the latest in a string of lawsuits the music industry has filed in an attempt to curb Internet piracy.

That effort was bolstered last year when the U.S. Supreme Court ruled that content companies can take legal action against technology firms that encourage copyright infringement.

Record labels owned by the world's four major music companies — Universal Music, Sony BMG, EMI Group Plc, and Warner Music Group Corp. (WMG) — brought the lawsuit against New York-based Lime Wire LLC.

The suit seeks $150,000 in damages for every song "willfully infringed" by LimeWire. It also names LimeWire parent Lime Group LLC as well as chief executive Mark Gorton and chief operating officer Greg Bildson as defendants.

LimeWire officials could not be reached for comment.

In the complaint, the record companies accuse LimeWire of profiting from illicit downloads of their music, saying "the scope of infringement is massive."

LimeWire and its executives "have had a direct financial interest in, and derived substantial benefit from, the infringement of plaintiffs' copyrighted sound recordings," the complaint said.

In a statement, industry trade group the Recording Industry Association of America said that "despite numerous efforts to engage LimeWire, the site's corporate owners have shown insufficient interest in developing a legal business model."

Last month, one of the world's best known file-sharing networks, Kazaa, agreed to pay more than $100 million and commit to going legitimate to settle two lawsuits brought by the movie and music industries.

Kazaa had emerged as the dominant file-sharing network after recording industry lawsuits brought about the collapse of the original Napster in 2001. Napster (NAPS) has since reemerged as a paid service.

In recent years, illicit file-sharing networks have lost ground as legitimate music services like Apple Computer Inc.'s (AAPL) iTunes gained popularity.

Further solidifying the case for legitimate music services was last year's precedent-setting ruling by the United States' top court, which stated that because "peer to peer" company Grokster's intent was to encourage copyright infringement, it could be held liable for the music traded on its network.