Eighteen music labels sued the Israeli file-sharing network iMesh.com Inc. for copyright infringement at the U.S. District Court in Manhattan on Friday, as part of their broader campaign against file-sharing companies.
In in interview with Haaretz, iMesh.com Inc. CEO Elan Oren confirmed the lawsuit was filed against the company.
"I arrived in Washington DC to lecture Senate members on payment-collection models for the file-sharing community, and several hours later I received the charge sheet," Oren said.
"We are the last company the record companies are suing and I was sure they had skipped over us," Oren said.
The company - Internet Meshing - was established in 1999 by David Habusha and Uri Nadav, both graduates of Mamram, the Israel Defense Forces' central computing facility. The two left the company in 2000 when they ran into difficulties raising funds, and Oren took over and introduced a new advertising-based economic model.
The company is registered in the state of Delaware, for tax purposes, and employs five people, all in Israel. When asked whether the company was profitable, Oren said, "We make a living."
Since its establishment in 1999, some 60 million users have downloaded the company's software, but only a few million are regular users. Only last week, the software was downloaded at least 500,000 times.
Tel Aviv-based iMesh is the third-largest file-sharing network behind Morpheus and the much larger KaZaa service. These networks allow millions of users around the world to trade software, music and video over the Internet.
The suit, filed in the U.S. District Court in Manhattan, charges the company with serving as a medium for the illegal distribution of copyrighted material.
According to the lawsuit, "Without widespread infringement of the most popular copyrighted sound recordings, [iMesh] would disappear."
The legal actions come after iMesh said in late August it planned to sell copyrighted music from independent artists, films and games, alongside file-swapping. Oren had told Reuters the company had no intention of abandoning file-sharing .
However, last April, a federal judge in Los Angeles ruled that the suits brought against Grokster, Morpheus and KaZaa, companies offering similar services to iMesh, were untenable. Judge Steven Wilson ruled that the suits were based on the assumption that the companies are aware and in control of every moment in the transfer of files, which he says is not true.
Judge Wilson also ruled that contrary to Napster, where the company operated a main control center, the technology used by the other firms does not make use of a control center.
"At some point I thought they [the labels] had understood that there is no difference between us, Grokster and Morpheus, and since their case was decided, they would see that it was pointless to sue. I was wrong," Oren said.