Warner Music, fresh from $110 million settlement with Bertelsmann on the former Napster, has sued Imeem, a music-based social networking site, for infringing the copyright of its artists. In a suit filed at the U.S. District Court, Central District of California, Warner accused Imeem of building a base of 16 million users on illegal free music…Imeem allows users ot upload MP3 files and share playlists with each other. Warner’s suit said: “Imeem is no innocent infringer. It invites Imeem’s millions of users to flock to its website to copy, adapt, distribute and perform unlicensed sound recordings and music videos.” It is claiming damages up to $150,000 for each copyrighted work infringed on the site.

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Imeem, based in Palo Alto, CA, is backed by Morgenthaler Ventures and Sequoia Capital. Last fall, UMG filed a similar complaint against MySpace and the suit is still pending.