LimeWire ruling changes game, should deter illegal file sharing

A federal judge in New York has delivered a precedent-setting decision around the controversial act of online file-sharing, ruling in favor of the recording industry and sending a message to anyone who facilitates or otherwise enables sharing of copyrighted materials that they will pay - and pay dearly.

The ruling, reported on CNET's Media Maverick blog, said the judge found that the parent company of the LimeWire software, as well as its founder, engaged in unfair competition and induced copyright infringement.

As much as I despise how the Recording Industry Association of America has used legal tactics to try to preserve old school business models and curb the growth of the digital music market, I have to say - and I still can't believe I'm saying it - that the judge was exactly right on this one.

Think about it: this isn't the summer of 1999 anymore. That's when those crazy college kids with powerful PCs and university broadband access were flocking to an online underground music-trading site called Napster. Theoretically, you could share any sort of file - including video - but music files known as mp3s were, by far, the reason people were coming to Napster. It took off like wildfire and, Napster immediately grabbed the attention of music fans - and the recording industry. It lasted about two years before eventually being shut down.

Back then, sharing files over the Internet wasn't so easy. Today, we have a lot of digital files and we share them easily - on YouTube, on Facebook, on Flickr, on Scribd. No matter the type of document, you can upload it to the cloud and give anyone you'd like access to it. That means that the unsigned garage bands, like those who found a following on Napster back in the day, now have YouTube channels, MySpace pages and other online venues to showcase themselves.

As for legal music downloads, iTunes, Amazon and Rhapsody have become household names. And they've been around a long time. That's why I find it hard to believe that anyone - including LimeWire - is still naive enough to think that there's nothing wrong with sharing digital music over the LimeWire network. The idea of getting something like music for free was hard to believe back in 1999. These days, it's almost laughable.

Almost.

I'm sure there are still some naive parents out there who truly don't know what their kids are doing online, including grabbing free music off of LimeWire. The RIAA tried - and was pretty effective at - sending a message by suing random file-sharers. But it took a PR beating for it. Going after LimeWire instead of file-sharers was a good call. The company had to know what was going on on its site.

I do have to say, though, that I was surprised that the judge also named founder Mark Gorton in his ruling, holding him responsible for decision. Maximum statutory damages is $150,000 for each registered work infringed and the network has surely enabled the sharing of millions of tracks. <

As CNET's Greg Sandoval points out, that part of the ruling "could set a precedent that might dissuade other entrepreneurs from challenging the entertainment sector's copyrights when developing new technology."

Maybe. But I like to think that true entrepreneurs will find a way to work within - or around - this decision or any other precedent-setting decision that's still to come. After all, look at how far we've come, despite all of the legal battles - from Napster all the way to this LimeWire ruling.