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Courts Still Clamping Down On File Sharing And Copyright Infringement
- 10/8/2010

The legal system continues to provide an avenue for copyright owners to fight piracy and copyright infringement, particularly in the face of technological advances that makes such piracy easier than ever.  A company that distributes file sharing software and that is aware that the software is used to share copyrighted material illegally may be held liable for inducing copyright infringement.
In a recent New York case, Arista Records LLC v. Lime Group LLC (“Lime Group”), the district court for the Southern District of New York addressed the well-known peer-to-peer file sharing software application, LimeWire.  LimeWire is made freely available by Lime Wire LLC ("Lime Wire," a subsidiary of Lime Group), and enables users to share digital copies of files that are stored on the users’ computers with other LimeWire users.
Arista Records along with 12 other plaintiffs sued Lime Group LLC and alleged 1) inducement of copyright infringement, 2) contributory copyright infringement, 3) vicarious copyright infringement, and 4) state common law copyright infringement and unfair competition.  These charges are in line with the 2005 United States Supreme Court decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, 545 U.S. 913 (2005), which held that Grokster was liable for copyright infringement by users of its peer-to-peer software for downloading copyrighted recordings.
In the Lime Group case, the district court granted the plaintiffs’ motion for summary judgment and held that Lime Wire had induced others to infringe copyrights in the shared files.  Among its findings, the court held that Lime Wire was aware that 98% of all files shared using its software were copyrighted materials being shared illegally.  The court also concluded that Lime Wire had considered, but did not take any meaningful steps to mitigate copyright infringement. In particular, the court decided that Lime Wire notice requiring users to affirm that they would not use the software to infringe was ineffective. Further, the court held that Lime Wire acquisition of certain search engine keywords indicated a deliberate attempt to market its software to users who were predisposed to infringe.  Further, the district court held that Lime Wire’s success as a business depended on use of the software for infringing purposes.  These conclusions led to the finding for summary judgment.
Following the outcome in the Lime Group case, eight music publishers filed a new copyright infringement lawsuit on June 16, 2010, also against Lime Wire.  This new case, EMI April Music Inc. v. Lime Wire, No. 10 Civ. 4695 (S.D.N.Y.), accuses Lime Wire of facilitating “pervasive online infringement.”
Click here for the complete Lime Group decision, and check back soon with the Ostrolenk Faber web site for updates in this and related copyright matters.