Federal Judge Calls Request for $75 Trillion in Damages in Lime Wire Case 'Absurd'

Does $75 trillion even exist? The 13 record companies that are suing file-sharing company Lime Wire for copyright infringement certainly thought so. When they won a summary judgment ruling last May, they demanded damages that could reach this mind-boggling amount, which is more than five times the national debt. (See, “Record Companies Win Summary Judgment Motion Against Lime Wire,” from The American Lawyer, http://bit.ly/gv8uvv.)

Manhattan federal district court judge Kimba Wood, however, saw things differently. She labeled the record companies' damages request “absurd” and contrary to copyright laws in a 14-page opinion. (See the Order at http://amlawdaily.typepad.com/limewiredamagesorder.pdf.)

The record companies, which had demanded damages ranging from $400 billion to $75 trillion, had argued that Section 504(c)(1) of the Copyright Act provided for damages for each instance of infringement where two or more parties were liable. For a popular site like Lime Wire, which had thousands of users and millions of downloads, Wood held that the damage award would be staggering under this interpretation. “If plaintiffs were able to pursue a statutory damage theory predicated on the number of direct infringers per work, defendants' damages could reach into the trillions,” she wrote. “As defendants note, plaintiffs are suggesting an award that is 'more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877.'”

While Wood conceded that the question of statutory interpretation was “an especially close question,” she concluded that damages should be limited to one damage award per work.

“We were pleased that the judge followed both the law and the logic in reaching the conclusion that she did,” says Lime Wire's attorney, Joseph Baio, of Willkie Farr & Gallagher. “As the judge said in her opinion, when the copyright law was initiated, legislatures couldn't possibly conceive of what the world would become with the Internet. As such, you couldn't use legislative history. Instead, the overarching issue is reasonableness in order to avoid [an] absurd and possibly unconstitutional outcome.” Baio, who is scheduled to represent Lime Wire when the damages trial begins on May 2, joked that the money that the record companies sought from his client would be better spent on paying for health care or wiping out the national debt.

Glenn Pomerantz, of Munger, Tolles & Olson, who represented 13 record company plaintiffs, did not return requests for comment.

Does $75 trillion even exist? The 13 record companies that are suing file-sharing company Lime Wire for copyright infringement certainly thought so. When they won a summary judgment ruling last May, they demanded damages that could reach this mind-boggling amount, which is more than five times the national debt. (See, “Record Companies Win Summary Judgment Motion Against Lime Wire,” from The American Lawyer, http://bit.ly/gv8uvv.)

Manhattan federal district court judge Kimba Wood, however, saw things differently. She labeled the record companies' damages request “absurd” and contrary to copyright laws in a 14-page opinion. (See the Order at http://amlawdaily.typepad.com/limewiredamagesorder.pdf.)

The record companies, which had demanded damages ranging from $400 billion to $75 trillion, had argued that Section 504(c)(1) of the Copyright Act provided for damages for each instance of infringement where two or more parties were liable. For a popular site like Lime Wire, which had thousands of users and millions of downloads, Wood held that the damage award would be staggering under this interpretation. “If plaintiffs were able to pursue a statutory damage theory predicated on the number of direct infringers per work, defendants' damages could reach into the trillions,” she wrote. “As defendants note, plaintiffs are suggesting an award that is 'more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877.'”

While Wood conceded that the question of statutory interpretation was “an especially close question,” she concluded that damages should be limited to one damage award per work.

“We were pleased that the judge followed both the law and the logic in reaching the conclusion that she did,” says Lime Wire's attorney, Joseph Baio, of Willkie Farr & Gallagher. “As the judge said in her opinion, when the copyright law was initiated, legislatures couldn't possibly conceive of what the world would become with the Internet. As such, you couldn't use legislative history. Instead, the overarching issue is reasonableness in order to avoid [an] absurd and possibly unconstitutional outcome.” Baio, who is scheduled to represent Lime Wire when the damages trial begins on May 2, joked that the money that the record companies sought from his client would be better spent on paying for health care or wiping out the national debt.

Glenn Pomerantz, of Munger, Tolles & Olson, who represented 13 record company plaintiffs, did not return requests for comment.