Music Publishers Score a Legal Win Over an Online Music Storage Firm

October 25, 2016, 5:05 PM UTC
A Spotify Ltd. Press Conference As Company Launches In Japan
An attendee tries out Spotify Ltd.'s music streaming service, operated by Spotify Japan K.K., on a laptop computer during a launch event in Tokyo, Japan, on Thursday, Sept. 29, 2016. Spotify Ltd. is bringing its popular online music service to Japan, a large and lucrative market where fans have demonstrated a continuing fondness for CDs and even vinyl records. Photographer: Akio Kon/Bloomberg via Getty Images
Photo by Akio Kon—Bloomberg via Getty Images

A U.S. appeals court ruled on Tuesday that record companies and music publishers that once formed part of EMI Group could pursue additional copyright infringement claims in a long-running lawsuit over defunct online music storage firm MP3tunes.

The 2nd U.S. Circuit Court of Appeals in New York also rejected an appeal by MP3tunes founder Michael Robertson, who was ordered to pay $12.2 million after a federal jury in 2014 found him liable for copyright infringement.

The rulings marked the latest turn in protracted court battles between the music industry and online content providers. They followed prior copyright litigation that led to the shutdown of another company Robertson founded,

Founded in 2005, initially as a website selling independent musicians’ songs, San Diego-based MP3tunes came to be known for its so-called cloud music service that allowed users to store music in online lockers.

In a lawsuit filed in 2007, EMI Group contended the MP3tunes website and a related one called enabled the infringement of copyrights in sound recordings, musical compositions, and cover art.

EMI was split up after the lawsuit’s filing, with Vivendi SA’s Universal Music Group (VIVEF) buying its recording music business and a consortium led by Sony (SNE) acquiring its publishing arm.

At trial, a federal jury in Manhattan in 2014 awarded the EMI companies nearly $48.1 million, a sum U.S. District Judge William Pauley in Manhattan later reduced, resulting in a $12.2 million judgment against Robertson.

On appeal, the music companies contended Pauley’s pre-trial rulings restricted them from pursuing other claims.

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They argued Pauley wrongly concluded MP3tunes was eligible for safe harbor protection under the Digital Millennium Copyright Act by meeting a requirement that service providers adopt and implement a policy for terminating repeat infringers.

In Tuesday’s ruling, a three-judge appellate panel rejected Pauley’s narrow definition of “repeat infringer” as only covering users who upload infringing content, rather than ones who downloaded songs for personal entertainment.

“In the context of this case, all it takes to be a ‘repeat infringer’ is to repeatedly upload or download copyrighted material for personal use,” U.S. Circuit Judge Raymond Lohier wrote.

The court also reversed a ruling dismissing claims that MP3tunes permitted copyright infringement for pre2007 MP3s and Beatles songs.

The 2nd Circuit rejected Robertson’s own appeal, saying “the evidence showed that Robertson acted in a manner intended to promote infringement.”

Ira Sacks, a lawyer for Robertson, declined comment. The music companies’ lawyer did not respond to a request for comment.