File sharing organisation LimeWire has lost a court battle with the Recording Industry Association of America (RIAA), the trade body for big-name music labels.
The peer-to-peer service and its operators were judged to be liable for inducement of widespread copyright theft and to have engaged in unfair competition.
According to court records seen by CNET, LimeWire founder Mark Gorton was also found guilty of the same charges.
"The court's decision is an important milestone in the creative community's fight to reclaim the internet as a platform for legitimate commerce. By finding LimeWire's chief executive 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," said Mitch Bainwol, chairman and chief executive of the RIAA, in a statement.
He added: "This definitive ruling is an extraordinary victory for the entire creative community. The court made clear that LimeWire was liable for inducing widespread copyright theft."
LimeWire sent IT PRO a statement from its chief executive George Searle, which read: "LimeWire strongly opposes the court's recent decision. LimeWire remains committed to developing innovative products and services for the end-user and to working with the entire music industry, including the major labels, to achieve this mission."
Last month, Bainwol praised the passing of the Digital Economy Act, saying the UK Government had recognised that ISPs have a big part to play in protecting creators and maintaining the web "as an engine of economic growth and a platform for innovative business models".
But the Act could be changed or repealed after the recent change in government.
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