May 12, 2011 6:54 PM

Lime Wire Settles for $105 Million Mid-Trial

Posted by Nate Raymond

Lime Wire, the defunct file sharing service, on Thursday agreed to a $105 million settlement with recording companies over infringement of music copyrights.

The company, which was ordered to shut down in October, was in the midst of a trial to determine damages after Manhattan federal district judge Kimba Wood last May granted 13 recording labels summary judgment against Lime Wire and founder Mark Gorton. The plaintiffs included the Recording Industry Association of America and several record labels led by Sony Corporation's Arista Records.

The $105 million settlement is a far cry from some of the dollar amounts sought by the recording companies and their lawyers at Munger, Tolles & Olson before trial. The companies had at one time sought $75 trillion in damages, though Judge Wood in March rejected that claim as "absurd."

After Wood's March ruling, the recording companies were limited to seeking up to $1.5 billion in damages. Given that Lime Wire no longer is in business, the companies would have been seeking to recoup the damages from Gorton.

News of the settlement came a day after Lime Wire's lawyers at Willkie Farr & Gallagher had cross-examined Edgar Bronfman, Jr., co-owner of Warner Music Group. Before the cross-exam was complete, both sides conducted a mediation and settled the case, annoucing that an agreement had been reached Thursday evening.

"Lime Wire and its founder, Mark Gorton, are pleased that this case has concluded," Willkie Farr said in a statement.

Mitch Bainwo, chairman and CEO of the RIAA, in a statement said the companies were pleased with the settlement.

"The resolution of this case is another milestone in the continuing evolution of online music to a legitimate marketplace that appropriately rewards creators," he said. "This hard-fought victory is reason for celebration by the entire music community, its fans, and the legal services that play by the rules."

Willkie partners Joseph Baio and Tariq Mundiya led the representation of Lime Wire. Willkie stepped into the case in September, becoming the third firm to represent Lime Wire after the company had previously turned to Wilson Sonsini Goodrich & Rosati and, before it, Fulbright & Jaworski.

Glenn Pomerantz of Munger, Tolles & Olson represented the recording companies. Munger Tolles replaced Cravath, Swaine & Moore, which had represented the recording industry through last May's summary judgment decision.

 

•RELATED STORIES FROM THE AM LAW LITIGATION DAILY

Manhattan Federal Judge Kimba Wood Calls Record Companies' Request for $75 Trillion in Damages "Absurd" in Lime Wire Copyright Case
March 11, 2011

As Recording Industry Gears Up for Trillion-Dollar Damages Trial Against Lime Wire, File Sharer Settles with Music Publishers
March 8, 2011

Lime Wire Pegs Hopes on Willkie Farr
October 28, 2010

Lime Wire Squeezed: Owner of File Sharing Site Changes Counsel in Record Companies' Copyright Case, Gets Hit with New Suit by Music Publishers
June 17, 2010

As Their Cravath Lawyer Bows Out, Record Companies Win Summary Judgment Against Lime Wire File Sharing Service in Copyright Case
May 12, 2010

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