A District Judge said that the peer-to-peer network had failed to make a case that its business had been harmed by the record labels' actions.

All four major global record labels -- Universal Music, Warner Music, EMI, and Sony BMG -- had filed a motion to dismiss a September 2006 countersuit against them by defendant Limewire, the P2P file-sharing service. US District Court Judge Gerard Lynch of New York's Southern district granted that motion yesterday, along with several other claims made under state law, however without prejudice.

At the basis of Limewire's case is its claim that the record labels attempted to monopolize the online music distribution market. The P2P company attempted to argue that the music industry leaders were taking illegal steps to protect their business model, which it stated was based around the sale of CDs and videos. By attempting to arrest the evolution of music distribution, its case proceeded, the record labels were doing damage to their own customers.

Judge Lynch's ruling puts to an end -- at least temporarily -- LimeWire's efforts to strike back at the labels after they filed a copyright infringement lawsuit against the service in August of last year. That case is still pending.

The judge's dismissal without prejudice may allow LimeWire to pursue a case against the labels in state court.

LimeWire says that it had attempted to come to terms with the labels, however was rebuffed and told either it could implement a filtering system developed by the labels or sign an agreement with rival iMesh.

In his ruling, Lynch said he saw no anticompetitive behavior, and that LimeWire had failed to show any facts to support their claims. He also found that the P2P provider had also failed to show that the companies were practicing price-fixing, another claim.

Neither the RIAA, which represents the labels in cases like this, nor Lime Group, the parent of LimeWire, had any public comment on the decision.