The company that operates the LimeWire file-sharing software continues to maneuver in an effort to save the company from a potential court-ordered closure but time is slipping away.
Lime Group has generated a lot of ill feeling with music executives after years of refusing to make even a minimum effort to compensate artists or protect against piracy, sources in the industry said. Lime Wire pocketed $20 million in revenue during some years while giving back nothing to those who created the music.
A Lime Group representative said in a statement Thursday evening: "We will continue to maintain an open dialogue with the rights holders and push forward with our objective of working in concert with the music industry."
So far, it doesn't appear that Lime Group has found much sympathy at the record labels. Music industry sources say the major recording companies have entered into "dialogue" with Gorton and his staff before and it has produced nothing. On multiple occasions, Gorton and Lime Group have signaled that they were ready to filter for pirated music files and send warning notices to those identified as sharing illegal files, a process known as "notice and take down" and few significant changes to the service were ever made, industry insiders told CNET. "They've had years to come to the table," said one music industry executive. "Nobody believes them anymore."
Even some of the staunchest defenders of technology companies suggest that by profiting from file sharing without implementing any antipiracy systems, Gorton and Lime Group were inviting disaster.
Jonathan Zittrain, a professor at Harvard Law School and co-founder of the Berkman Center for Internet and Society, said Wood's decision served as a warning to services that profit from illegal file sharing.
"If you're coming real close to flying the Jolly Roger as a business, you can expect to be in legal trouble," Zittrain told The New York Times.
Since Wood made her ruling against the Lime Group, Gorton and Lime Wire managers have launched a media campaign. In multiple interviews, the company's leaders have sounded astonished that they are in this situation and appear to have just now discovered such things as filtering and notice-and-takedown letters. On the contrary, there's plenty of evidence to show that for years Lime Group has chosen to ignore such copyright protections.
"One way to address what the court is talking about, short of shutting down the network, which I think is overreaching and drastic, is to filter the network of these files in question," Zeeshan Zaidi, Lime Wire's chief operating officer, told Wired.com. "This is a way for us to move forward in the case."
Most companies operating content-sharing services know that to avoid costly litigation and perhaps a court-ordered shutdown, they must provide filtering, meaning they could use software that automatically recognizes and removes unauthorized music files from a site. Video-sharing site YouTube, which has a copyright lawsuit filed by Viacom hanging over its head, launched a filtering system years ago. Google CEO Eric Schmidt has said YouTube could turn a profit this year.
In the case of Lime Group, the company has long had the ability to filter but chose not to implement filtering in any meaningful way, Wood said in her decision for summary judgment. She wrote:
"In May 2006, Lime Wire implemented an optional, hash-based content filter. A hash-based filter can identify a digital file that contains copyrighted content, and block a user from downloading the file. The 'default' setting of LimeWire's hash-based filter was 'off.'
"(Lime Wire managers) could have made the hash-based content filter mandatory for all LimeWire users, or made 'on' the default setting, so that a user's file-sharing activities would be subject to the filtering process unless he affirmatively deactivated the filter. According to (the company's) expert Steven Gribble, (the company) chose to set the filter to 'off' because it wished to provide users with 'enough flexibility to enable, disable, or configure filtering.' (The managers') decision was a conscious 'design choice,' the direct result of which was a failure to mitigate infringement."
So, if Gorton and his company sound wide-eyed and naive about filtering and other antipiracy tactics, some record company executives say they are only undermining their credibility as well as their attempts to convince the music industry that they would make good partners in a legitimate enterprise.
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