In a victory for the Recording Industry Association of America and artists, U.S. District Judge Kimba Wood has ruled in New York that LimeWire LLC and its CEO were liable for inducing the infringement of more than 10,000 sound recordings, declaring those materials were owned by major labels including UMG Recordings Inc. and Sony Music Entertainment Inc. DigiDayDaily reports that LimeWire is the largest remaining commercial P2P service and has not followed other such enterprises that negotiated licenses or discontinued their service after the Supreme Court decision in MGM v. Grokster.

In Grokster, the high court ruled in 2005 that providers of software designed to enable “file-sharing” of copyrighted works may be held liable for the infringement occurring due to its use. The justices held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

According to Law.com, the record industry trade group and the 13 record companies suing LimeWire for copyright infringement demanded damages ranging from $400 billion to $75 trillion, claiming that Section 504(c)(1) of the Copyright Act allows them to request damages for each instance of infringement where two or more parties were liable; the trade group. in other words, argued for damages not only for the individual works but for every instance in which that work was infringed (downloaded by a user).

Judge Wood ruled that this extreme argument on statutory damages was “absurd” and offending to the “canon that we should avoid endorsing statutory interpretations that would lead to absurd results.” Instead, she ruled that the most plausible interpretation of 504(c) authorizes only a single statutory damage award per work against LimeWire, regardless of how many users infringed it.

Mitch Bainwol, who heads the industry group, labeled the court’s decision as “an important milestone in the creative community’s fight to reclaim the Internet as a platform for legitimate commerce. By finding LimeWire’s CEO personally liable, in addition to his company, the court has sent a clear signal to those who think they can devise and profit from a piracy scheme that will escape accountability.”

On the LimeWire site, the company has posted notice that is under court order to stop distributing its software along with a copy of the injunction ordering it to do so.

[2016 update: Since this post originally went up, the company has gone defunct. With a tip of the hat to reader SG, the injunction can be viewed for now here. The Biederman Blog’s Editors.]