While admitting no wrongdoing, the students agreed to pay damages of between $12,000 and $17,500 each and not illegally distribute copyrighted music, the Recording Industry Association of America said Thursday.
But perhaps more significantly, the industry credited the lawsuits with prompting at least 18 other similar networks at universities to go off-line since the association filed the lawsuits April 3.
Record companies had previously sued only file-sharing services, where most illegal copying and swapping of copyright songs takes place. The students were accused of running a service similar to the now-defunct Napster, which was ordered shut down after the courts found it violated musical copyrights.
"The message is clearly getting through that distributing copyrighted works without permission is illegal, can have consequences and that we will move quickly and effectively to enforce our rights," said Matt Oppenheim, the association's senior vice president of business and legal affairs.
The RIAA said the defendants -- students at Princeton University, Rensselaer Polytechnic Institute and Michigan Technological University -- stored a total of more than 1 million songs on central servers and made them available to people with access to their schools' high-speed Internet networks. The schools were not named in the lawsuits.
The RIAA originally sought damages of $150,000 per song, but Oppenheim said it was "in everyone's best interest to come to a quick resolution."
Oppenheim added that the defendants "now clearly understand the seriousness with which we view this type of illegal behavior."
Princeton student Daniel Peng and Michigan Tech student Joseph Nievelt each agreed to pay the RIAA $15,000. At Rensselaer in Troy, N.Y., Jesse Jordan agreed to pay $12,000 and fellow student Aaron Sherman agreed to pay $17,500.
Peng's attorney, Howard Ende, called the lawsuit "outrageous."
"I don't think the suit was really about him, it [was] about sending a message -- a message meant to intimidate," Ende said.
Jordan's father, Andy Jordan, of Oceanside, N.Y., said his son was innocent, but he did not want to embroil the 19-year-old freshman in lengthy litigation.
"The furthest thing from his mind is trying to steal copyrights," Andy Jordan said.
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