CAPITOL RECORDS v. MP3TUNES


Earlier this week, the federal district court for the Southern District of New York handed down a ruling which basically found that Michael Robertson's MP3tunes.com did not violate copyright law, Capitol Records, Inc. v. MP3Tunes, LLC, No. 07 Civ. 9931 (S.D.N.Y. Aug. 24, 2011). At the very beginning of his decision, district court judge William Pauley wryly pointed out that Michael Robertson "is an online entrepreneur familiar with high-stakes copyright litigation." He was referring to MP3.com which Robertson founded years ago. MP3.com offered users a "digital locker box" that allowed them to access their music from any internet connected device. However, various labels brought suit against MP3.com and the result was a $53 million judgment which led to the sale of MP3.com and the abandonment of its digital locker box. The crux of the case was that although users of MP3.com had to possess a CD containing the songs they wanted to store on their locker box, MP3.com had already made copies of almost all commercially successful music. When the user accessed songs they were accessing songs copied and uploaded by MP3.com not songs they had themselves uploaded. The court found this to be copyright infringement, UMG Recordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y. 2000).

In this case MP3tunes similar to MP3.com, also offers a digital locker box. But unlike MP3.com, users of MP3tunes.com have to upload their own digital files. However, a companion website, also owned by Robertson, called Sideload.com, allows consumers to search for and download free music from any website offering music for free.

In September 2007, EMI sent a takedown notice to MP3tunes specifying 350 song titles and URL’s that allegedly infringed EMI’s copyrights. MP3tunes took down links to the specified songs, however, it did not remove the songs from its users’ digital locker boxes. Additionally, EMI demanded that MP3tunes “remove all of EMI’s copyrighted works, even those not specifically identified.”

In its motion for summary judgment, EMI argued that sideloading songs from the Web directly to personal lockers (like Google's new blog Magnifier is doing and Amazon's store is doing) was copyright infringement. EMI also claimed that MP3tunes didn't do enough to stop repeat infringers and that MP3tunes should have taken down all EMI content because their notices provided a “representative list.” Judge Pauley disagreed with all these arguments and found EMI’s arguments misconstrued the Digital Millennium Copyright Act (the “DMCA”) and applicable case law.

The court held that MP3tunes could avail itself of the safe harbor provisions in Section 512 of the the DMCA because it maintained and implemented (i) a “repeat infringer policy” and (ii) it expeditiously removed songs specifically identified in EMI’s takedown notice. With regards to (i), “service providers that purposefully fail to keep adequate records of the identity and activities of their users and fail to terminate users no matter how persistent and flagrant their infringement, are not eligible for protection under the safe harbor,” Capitol Records, Inc. v. MP3Tunes. In this case, MP3tunes satisfied these requirements because its Terms of Use contained a provision stating that MP3tunes had the authority to terminate users’ accounts for repeat infringement, it kept records of all songs uploaded and downloaded by its users, and it actually terminated the accounts of 153 users after receiving the takedown notice from EMI.

The court found that MP3tunes satisfied (ii) because they complied with requests to take down specific songs. Contrary to EMI’s argument that they were required to remove all of EMI’s copyrighted works, the court found that the DMCA did not require MP3tunes to conduct its own searches for infringing content in order to take advantage of the safe harbor provisions. Judge Pauley sited Viacom v. YouTube, discussed below, for the following proposition: “service providers must take down the specific infringing material identified in the notice but are not required to search for and take down other material that may infringe the identified copyrighted works.”

Therefore, the court held that MP3Tunes.com complied with the DMCA and ruled against EMI’s demand for broader searches. It is also interesting to note that even if MP3tunes.com conducted a deeper search, it could not determine which “free” songs were or were not authorized by EMI. Judge Pauley pointed out:

[A]s part of its innovative marketing, EMI itself regularly distributes works on the internet for free. Because of these activities, EMI’s executives concede that internet users, including MP3tunes’ users and executives, have no way of knowing for sure whether free songs on the internet are authorized.

However, the court did find that MP3tunes should have taken down specific songs identified in EMI’s takedown notice that were present in individual users’ digital locker boxes.

EMI also argued that works prior to 1972 were not covered by the DMCA. The court specifically rejected this argument in a footnote. This could have an impact on Universal’s continuing lawsuit against Grooveshark based on its claim that the DMCA does not apply to pre-1972 songs.

MP3tunes Extends the DMCA’s Safe Harbor to Digital Locker Services

In Viacom v. YouTube, also decided in the Southern District of New York, the court held that YouTube, similar to MP3tunes, was entitled to the protection of the safe harbor provisions of Section 512 of the DMCA. In that case, Viacom complained that YouTube contained a great deal of its copyrighted material, including thousands of excerpts from hit shows, such as The Daily Show with John Stuart. YouTube argued that it complied with each request from Viacom that YouTube take down specific copyrighted material. Similar to EMI in the MP3tunes case, Viacom demanded that YouTube take more aggressive action. But the court disagreed, holding that so long as YouTube continued to expeditiously remove content from its site and in accordance with copyright holders’ takedown notices, it would be immune from liability for copyright infringement based on content uploaded by its users.

The decision in MP3tunes extends the safe harbor beyond the parameters of Viacom v. YouTube. MP3tunes is the first case to hold that digital locker services are legal, so long as the service complies with Section 512 of the DMCA.

Prior to this holding, there was a grey area surrounding the legal concept of digital locker boxes. Under the Home Audio Recording Act of 1995, home audio taping was deemed legal, provided that music fans only made copies for their personal entertainment. However, it has never been clearly decided, until now, whether third parties could legally provide digital locker boxes to enable those music fans to listen to their music from any internet connected device. Therefore, the holding in MP3tunes provides a powerful precedent for the legality of digital locker boxes, including those provided by Apple, Google, and Amazon.