Pryor Cashman Partner Frank Scibilia spoke to CNET for its July 20, 2011 article “Music industry zeros in again on LimeWire.” The article reports that Merlin, a trade group representing more than 12,000 indie labels, has claimed in a lawsuit that LimeWire broke a 2008 promise to compensate them for the millions of music tracks LimeWire users pirated via the LimeWire site.

In 2007, Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI Music accused the company of cashing in on a service designed to help people pirate music. Last year, a federal judge ruled that LimeWire, and its creator Mark Gorton, were liable for copyright infringement. Two months ago, Gorton agreed to pay the majors $105 million to settle.

According to legal documents filed last week with a New York federal court, LimeWire and Gorton agreed to pay Merlin members an amount that was in line with whatever LimeWire ended up paying to settle with the four major music labels.

While a court date has yet to be scheduled, Merlin wants a settlement figure that uses the $105 settlement as a benchmark. According to Scibilia, one of Merlin’s lawyers, Merlin sent Gorton and LimeWire a cease-and-desist letter in 2008 and suggested that the trade group would have filed a copyright suit against Gorton then. However, Gorton asked Merlin to refrain from filing a copyright suit until his case with the major labels was completed and a settlement was reached.

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