Case brought for copyright infringement, unfair competition.

The major record labels have sued peer-to-peer service LimeWire and executives Mark Gorton and Greg Bildson for copyright infringement and unfair competition today (Aug. 4).

The suit, filed in federal District Court in New York, claims that since August 2000 the defendants designed, distributed and promoted the LimeWire software and network for its "superior infringement capabilities." The defendants allegedly profited by receiving payments from third parties for advertisements, bundling third-party software with LimeWire, and a shopping function in LimeWire Basic software.

"Despite numerous efforts to engage LimeWire, the site's corporate owners have shown insufficient interest in developing a legal business model that adequately respects copyrights," says an RIAA spokesperson. "While other services have come productively to the table, LimeWire has sat back and continued to reap profits on the backs of the music community. That is unfortunate and has left us no choice but to file a lawsuit to protect the rights and livelihoods of artists, songwriters and record label employees, as well as those companies building legitimate businesses based on music."

The labels seek an injunction and damages of at least $30,000 for every infringement of every recording and at least $150,000 for every willful infringement if each recording.

Last week Sharman Networks and others involved with P2P network Kazaa settled with the labels for $115 million and agreed to go legit. A similar deal was struck last year with Grokster.

StreamCast, the operator of Morpheus, is still part of the MGM Studios vs. Grokster litigation pending in Los Angeles. The labels have not yet sued the operators of BitTorrent and eDonkey. Last week, Sam Yagan, president of MetaMachine which distributes eDonkey, was reported as saying that he was looking for a positive resolution for all parties in the near future.

LimeWire, Gorton and Bildson could not be reached for comment.