US record labels have claimed another victory in their war against filesharing, winning a major court case against LimeWire. On Tuesday, a federal court ruled against the popular peer-to-peer platform, finding LimeWire's owners personally liable for copyright infringement.

The Recording Industry Association of America (RIAA), which represents the four major US labels, brought the case against LimeWire in August 2006. Almost four years later, the service is still perhaps the most popular software for exchanging files – allowing users to search each other's music libraries for songs they would like to share. According to CNET, LimeWire has been downloaded more than 200m times – including 340,000 downloads last week. A survey by the NDP Group found that LimeWire was used by 58% of people who have downloaded music from a peer-to-peer network in the last year.

Like Napster (and AIMster and Grokster) before them, LimeWire's owners denied they were responsible for the legality of files shared by their users. Unlike Napster, LimeWire does not host any shared files on their own servers – the material is distributed among users. But Judge Kimba Wood was not convinced by the argument. "The evidence demonstrates that [LimeWire] optimised [their] features to ensure that users [could] download digital recordings, the majority of which are protected by copyright," she said.. "[Lime Wire] assisted users in committing infringement."

In a summary judgment, Wood ruled that LimeWire founder Mark Gorton, as well as parent company Lime Group, had committed copyright infringement, engaged in unfair competition, and induced copyright infringement. By finding Gorton personally responsible, Wood's decision will be particularly terrifying to other "edge case" entrepreneurs. In other words, Facebook's owners had better make sure people don't start uploading illegal MP3s.

The court has not yet determined the issue of monetary damages, though the RIAA has claimed they are owed up to $150,000 for every infringing work. With millions of files in question, that number could become huge. "[LimeWire] thumbed its nose at the law and creators," the RIAA's chairman said. Labels will now likely move for an injunction against LimeWire, forcing the service to go offline.

According to George Searle, chief executive of LimeWire, the company "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".