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Arista Records LLC; Atlantic Recording Corporation; Arista Music, Fka v. Lime Group LLC; Lime Wire LLC; Mark Gorton; Greg Bildson; and M.J.G.

March 29, 2011

ARISTA RECORDS LLC; ATLANTIC RECORDING CORPORATION; ARISTA MUSIC, FKA BMG MUSIC; CAPITOL RECORDS, INC; ELEKTRA ENTERTAINMENT GROUP INC; INTERSCOPE RECORDS; LAFACE RECORDS LLC; MOTOWN RECORD COMPANY, L.P.; PRIORITY RECORDS LLC; SONY MUSIC ENTERTAINMENT, FKA SONY BMG MUSIC ENTERTAINMENT; UMG RECORDINGS, INC; VIRGIN RECORDS AMERICA, INC.; AND WARNER BROS. RECORDS INC.,
PLAINTIFFS,
v.
LIME GROUP LLC; LIME WIRE LLC; MARK GORTON; GREG BILDSON; AND M.J.G. LIME WIRE FAMILY LIMITED PARTNERSHIP, DEFENDANTS.



The opinion of the court was delivered by: Kimba M. Wood, U.S.D.J.:

AMENDED OPINION AND ORDER

I. Introduction

This Order and Opinion amends the Court's March 18, 2011 Order and Opinion, (Dkt. Entry No. 630), with the deletion of text as indicated in the "Conclusion" section of this Opinion. See infra, page 8.

On May 11, 2010, this Court granted summary judgment in favor of Plaintiffs on their claims against Defendants LimeWire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants had induced multiple users of the LimeWire online file-sharing program ("LimeWire") to infringe Plaintiffs' copyrights. In the Court's Opinion and Order (as amended on May 25, 2010), the Court detailed this case's procedural and factual background, familiarity with which is assumed. (See Dkt. Entry No. 223.) The litigation is now in the damage phase, with a trial on damages scheduled for May 2, 2011.

Plaintiffs have identified approximately 11,205 sound recordings that have allegedly been infringed through the LimeWire system. Of those, approximately 9,715 are sound recordings as to which Plaintiffs have elected to seek statutory damages under Section 504(c)(1) of the Copyright Act.*fn1 See 17 U.S.C. § 504(c)(1).

The parties now seek resolution of a discovery dispute and accompanying legal question concerning the applicability of Section 412 of the Copyright Act to Plaintiffs' claims for statutory damage awards against Defendants. Defendants contend that, pursuant to Section 412, if an individual LimeWire user infringed a work prior to the registration of the copyright for that work, Plaintiffs are barred from recovering a statutory damage award from Defendants with respect to that work, unless registration was made within three months after the first publication of that work. See 17 U.S.C. § 412(2) (stating that no statutory damage award and attorney's fees shall be made for "any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work [hereinafter the "statutory three month grace period]."). Defendants assert that Plaintiffs failed to register 1,322 sound recordings within the statutory three month grace period. (Def. Mem. at 3.) Accordingly, Defendants are seeking discovery as to the first date that those 1,322 sound recordings were downloaded on the LimeWire system.

Plaintiffs have filed an objection to Magistrate Judge Freeman's December 28, 2010 "Report & Recommendation Concerning 17 U.S.C. § 412(2)," which recommended that Defendants be granted such discovery. (Dkt. Entry No. 398.) For the reasons that follow, the Court ADOPTS the Report in its entirety.

II. Procedural History

The procedural background leading up to the December 28, 2010 Report & Recommendation is as follows:

On November 2, 2010, without addressing the merits of Defendants' argument, Judge Freeman granted Defendants' discovery request, ordering, inter alia, Plaintiffs to "provide Defendants with documents or information sufficient to show the earliest dates that each such recording was downloaded." (Dkt. Entry No. 339, at 3.)

Plaintiffs appealed Judge Freeman's Order. On November 19, 2010, the undersigned issued an Order holding in abeyance the portion of Judge Freeman's Order compelling Plaintiffs to produce such evidence. (Dkt. Entry No. 363.) The undersigned then referred to Judge Freeman, for a report and recommendation, the threshold legal question of whether the infringement of a work by an individual LimeWire user prior to the registration*fn2 of the copyright for that work should bar Plaintiffs from recovering a statutory damage award from Defendants with respect to that work. (Id.)

On December 28, 2010, Judge Freeman issued a Report and Recommendation, concluding that, under Section 412, where an individual infringed a work on the LimeWire system prior to the Registration of the copyright for that work, Plaintiffs are not entitled to statutory damages with respect to that work. (Dkt. Entry No. 398, at 2 (hereinafter the "Report").) Specifically, the Report recommends that, so long as any LimeWire user infringed a work prior to the Registration of the copyright for that work, Plaintiffs should not be able to recover a statutory damage award from Defendants with respect to that work, even if there are other individual LimeWire users who first infringed that work after the work was registered. The Report concludes by recommending that Plaintiffs be directed to produce the discovery set forth in the November 2, 2010 Order, namely, "information sufficient to show the earliest dates that each such recording was downloaded." (Report at 10.)

Plaintiffs have filed a timely objection to the Report. ...


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