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The iMesh.com service will change later this year
A software firm has agreed to pay $4.1m (£2.2m) compensation to the US music industry for copyright infringement.
The software from Israeli company Bridgemar Services, formerly known as iMesh.com, allows people to download music using the internet.
Until now, US courts had ruled that software companies were not liable when their products are used by others for copyright infringement.
The settlement is seen as a victory for the music industry.
Damages
Bridgemar Services also agreed, under the settlement, which was approved by a New York court, to change its internet service later this year to prevent consumers from illegally distributing music or downloading songs.
Until then the software - which has been downloaded more than 76 million times - will continue to function.
In its lawsuit, record companies alleged that iMesh software helped internet users illegally exchange "millions" of songs and sought $150,000 (£81,340) in damages for each song, plus attorney fees.
Bridgemar spokeswoman Connie Connors said it was too early to know whether iMesh customers will ultimately have to pay for downloaded music.
She said it depended on what agreements could be reached with major record labels.
Recording Industry Association of America chief executive Mitch Bainwol praised the settlement and Bridgemar's "constructive approach".
A software firm has agreed to pay $4.1m (£2.2m) compensation to the US music industry for copyright infringement.
The software from Israeli company Bridgemar Services, formerly known as iMesh.com, allows people to download music using the internet.
Until now, US courts had ruled that software companies were not liable when their products are used by others for copyright infringement.
The settlement is seen as a victory for the music industry.
Damages
Bridgemar Services also agreed, under the settlement, which was approved by a New York court, to change its internet service later this year to prevent consumers from illegally distributing music or downloading songs.
Until then the software - which has been downloaded more than 76 million times - will continue to function.
In its lawsuit, record companies alleged that iMesh software helped internet users illegally exchange "millions" of songs and sought $150,000 (£81,340) in damages for each song, plus attorney fees.
Bridgemar spokeswoman Connie Connors said it was too early to know whether iMesh customers will ultimately have to pay for downloaded music.
She said it depended on what agreements could be reached with major record labels.
Recording Industry Association of America chief executive Mitch Bainwol praised the settlement and Bridgemar's "constructive approach".
