LimeWire settles with RIAA for $105 million
(CNET) - After ten years facillitating illegal file-sharing, LimeWire and its founder Mark Gorton have agreed to compensate the four largest record labels to the tune of $105 million.
As first reported by CNET, Gorton's lawyers closed in on a settlement agreement today after meeting this morning to hammer out a deal.
"We are pleased to have reached a large monetary settlement following the court's finding that both Lime Wire and its founder Mark Gorton are personally liable for copyright infringement," said Mitch Bainwol, chairman of the Recording Industry Association of America. "As the court heard during the last two weeks, LimeWire wreaked enormous damage on the music community, helping contribute to thousands of lost jobs and fewer opportunities for aspiring artists."
Bainwol can now report back to his label members that he has taken out the last for-profit company operating an illegal file-sharing service in the United States, though the pirating of music continues. As for Gorton, 44, he avoids paying what might have been a financially ruinous damages award.
After a U.S. District Judge found LimeWire and Gorton personally liable for copyright infringement and ordered the company to cease operations, the case then moved to assessing damages. Over the past two weeks, a jury in Manhattan heard evidence in the case as it prepared to determine what amount Lime Wire and Gorton would have to pay. If the jury had found he deserved the maximum under the law, Gorton could have been required to pay as much as $1.4 billion, reports CNET's Greg Sandoval.
In a statement, Gorton's lawyer, Joseph Baio, attempted to show that the $100 million settlement was far short of the kind of money the RIAA sought. "In the recent past, the plaintiffs have pressed for a $75 trillion verdict. The Court labeled that claim 'absurd.' Plaintiffs then claimed that they suffered $40 to $50 billion of damages and that LimeWire was responsible for it all. At other times they have claimed that the amount of damages exceeded $1.4 billion."
During the damages hearing last week, RIAA lawyers noted that Gorton possessed $100 million in an IRA account. His Manhattan home is worth more than $4 million. In addition to LimeWire, Gorton operates a hedge fund and a medical-software company. Gorton's lawyers claimed in court that he made little money from LimeWire. Maybe, but records show the privately owned company generated $26 million in revenue in 2006 and sales climbed dramatically after that. During most of Lime Wire's 10-year history, Gorton was chairman, CEO and only board member.
Where the settlement money will go is hard to tell. In similar cases in the past, the RIAA has split up big awards with the four member labels. How much of the money goes back to the artists is unclear.