Bearshare, RIAA settle for $30M

File-swapping network is the latest P2P service to succumb to the music industry's legal wrath.

The June 2005 Supreme Court decision that proved to be the death knell for many of the most popular peer-to-peer (P2P) file-swapping services has taken another victim.

Once-popular file-sharing giant Bearshare has entered into a $30 million pact with the Recording Industry Association of America (RIAA) to settle copyright violation charges against the company and has sold off some of its assets to iMesh, a P2P service that went legit last year.

The agreement is between the RIAA, which represents the major record labels, and Bearshare parent company Free Peers Inc., and its principal owners Vincent Falco and Louis Tatta. The settlement was filed today in US District Court in New York.

In connection with the deal, iMesh, which went legit by launching an industry-approved, fee-based P2P service last October, has acquired the software, user base, domain name, logo, and name from Bearshare for an undisclosed sum. iMesh formed a subsidiary called MusicLab for the transaction.

"iMesh is committed to transitioning the compelling experience of P2P to an authorized marketplace," iMesh executive chairman Robert Summer said in a statement. "Our strategy includes expansion through acquisition and the purchase of assets through our subsidiary, MusicLab."

Bearshare is just the latest of many popular P2P services to face the wrath of the music industry in the wake of the June 2005 MGM v. Grokster case, in which the court said Grokster and StreamCast Network Inc.'s Morpheus could be held liable for copyright violation for acts taken in the course of marketing their file-sharing software.

The decision had a ripple effect among P2Ps, with the RIAA sending off a series of cease-and-desist letters to the popular file-sharing services, citing the decision.

Grokster itself settled and has aligned itself with long-awaited legal P2P service Mashboxx. WinMX went under, while eDonkey has said it is still weighing its options.

Streamcast, however, has said it will seek its day in court after seeing its talks with the RIAA hit an impasse.