Labels lash out at LimeWire

Defunct file-sharing site slammed for not honoring settlement

Independent music labels are taking their DIY ethic one step further and telling “the man” to pay up. In this case, the proverbial man is the now-defunct LimeWire peer-to-peer file-sharing website, which according to the lawsuit, has failed to pay up from a copyright infringement settlement.

The labels, represented by Merlin, a non-profit organization that fights commercial copyright exploitation for indie labels, brought suit against LimeWire for failing to honor the terms of its agreement. Merlin is seeking at least $5 million in damages.

In September 2008, Merlin issued a cease-and-desist order to LimeWire, allegedly stating that it would not sue if LimeWire offered the indie labels the same settlement as the major labels—Universal, Sony, Warner and EMI—also seeking compensation.

Now, Merlin is incensed because LimeWire recently settled its lawsuit with the National Music Publishers Association in which it agreed to pay U.S. music publishers $12 million, and $105 million to majors, but left Merlin’s labels high and dry.

Merlin and LimeWire reportedly had negotiated a number of agreements that would require the file-sharing company to pay a pro-rata portion to indie labels based on market share based on whatever material terms LimeWire gave to the majors.

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