limewire.gif(Tech Dirt) Last month, the RIAA sued Limewire after Limewire wouldn’t agree to simply roll over and pretend the RIAA’s interpretation of the Supreme Court decision in the Grokster case was actually what the Supreme Court said. The court actually said that services could be found liable, if they were shown to actively induce infringement. The RIAA and the MPAA pretended this meant that any file sharing network that had unauthorized content was flat-out illegal.

Mystech: Nice to see the RIAA on the defensive in court again. Winning this ruling could cost them millions in lobbying fees and campaign contributions!

Of course, that’s a bit of a stretch. So, it already seemed like it would be an interesting case, but now Limewire has hit back even harder with counterclaims accusing the RIAA of antitrust violations, consumer fraud and other misconduct. Specifically, they seem to be making the case that the RIAA only wants to shut down Limewire because it is a competitive distribution mechanism that they cannot control, which helps compete with their monopolistic control on traditional distribution. It’s an interesting claim that does make some sense, though the RIAA will simply try to paint Limewire as a tool for “thieves.” As with many of these types of cases, there’s probably a decent chance that the sides will settle before any decision is made, but in this case, it would be very interesting to see the actual outcome of any lawsuit — both on the issue of whether or not simply running a file sharing network is inducement and on whether or not there really is an antitrust claim here. If the case does go forward and the RIAA loses on the antitrust issue, it could have a big impact on the traditional labels, and could actually be a catalyst towards forcing them to accept the changing nature of the market. This is becoming a case well worth watching.