The label that publishes the Kidz Bop compilations sued Limewire late last week in a federal court in New York, alleging that the P2P company contributes to and induces copyright infringement. The lawsuit references a number of Kidz Bop titles as well as music from other artists on the associated Razor & Tie label that were at some point available for download through Limewire's client. It names Limewire itself, its Chairman Mark Gorton, former CTO Greg Bildson and the Lime Wire Family Foundation. From the lawsuit:

"The vast magnitude of the hotbed of piracy created by Defendants is staggering and Defendants' services are a breeding ground for copyright infringement of unprecedented magnitude."

The lawsuit is similar to the one filed by major record labels about two years ago, and in fact makes multiple references to it, as well to the US Supreme Court decision against Grokster. The plaintiffs seek damages of 150.000 dollars per individual instance of infringement, which could potentially lead to a multi-million dollar verdict.

The lawsuit argues that Limewire's integrated music player as well as its capability to search for artists or song titles is proof that the system is designed to facilitate the infringement of musical works. It also refers to the sale of Limewire Pro as well as advertising components that used to be bundled with the software as proof that Limewire is making good money through its users infringing actions.

One interesting side note of the lawsuit is the allegation that Limewire Chairman Mark Gorton has set up a complicated ownership structure to protect his assets from potential court decisions against him and his company. From the lawsuit:

"In response to the Supreme Court's decision in MGM vs. Grokster, defendants took steps to insulate ill-gotten gains from creditors, including the Plaintiffs. In particular, Mr. Gorton established a family-limited partnership into which he placed assets in an effort to avoid financial liability in the event of a judgement against him."

Also notable: The lawsuit does not mention Limewire's copyright filters or its more recent moves to rights holder-friendly business models, like the Limewire store or its upcoming advertising platform.

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