Music rights agency Merlin wins illegal file sharing battle with LimeWire
Settlement, worth up to $10m, is victory for agency whose clients include indie labels representing Adele and Arctic Monkeys
Winning ways … Adele, pictured holding her six Grammy awards, is one of the artists who could benefit from Merlin's settlement with LimeWire. Photograph: Michael Tran/FilmMagic
Merlin, the rights agency for independent record labels representing acts including Adele and Arctic Monkeys, has reached a landmark deal with LimeWire worth millions of dollars to artists to end a long-running legal battle over illegal file sharing.
The out-of-court settlement, which is thought to be worth between $5m and $10m, is the largest the independent music sector has won in its battle against digital music piracy.
Last year the major music labels won a $105m (£64m) settlement with LimeWire.
However, Charles Caldas, the chief executive of Merlin, said that smaller labels had been "totally left out in the cold on a deal with a service that infringed their rights as much as the major labels".
"The exclusion of independents from past major settlements such as Kazaa was a key factor in the formation of Merlin, and I am proud to say that this time, via the actions of Merlin, our members' rights have been properly protected," added Caldas.
Details of LimeWire's deal with Merlin were not disclosed beyond that the multi-million pound settlement is the largest the agency has struck to date, and its first global action.
However, according to Merlin it is "commensurate" with the deal struck by the major labels, taking into account the smaller market share of its members.
Merlin's previous biggest deal was a $3.6m payout by US-based XM Satellite Radio, which has DJs including Howard Stern, struck last year. Merlin's members account for about 10% of the US music market.
"It is clearly the most significant [deal Merlin has struck] representing as it does the successful conclusion of a high profile, large scale, global copyright infringement claim on an equal footing with the major labels," said Charlie Lexton, head of business affairs and general counsel at Merlin. "An unprecedented moment for independents."
Founded in 2000, LimeWire was the last of the first generation of peer-to-peer filesharing networks after Grokster, Kazaa, eDonkey and Napster folded under pressure from the music industry. It closed last year.
In 2006 Kazaa settled with the major labels for $115m and Grokster agreed to pay up to $50m in 2005.
Caldas said that Merlin was continuing to pursue legal actions against pirate operations "but nothing of the scale of Limewire".
However, he pointed out that Merlin's main aim is to try and facilitate new legitimate business models to help indies increase their revenues. Merlin has about 15 deals in place with services including Spotify, Muve and Google Music.
guardian.co.uk, Thursday 1 March 2012 15.29 GMT
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