Grooveshark Insists It's Legal; Points Out That Using DMCA Safe Harbors Is Not Illegal

from the good-point dept

Wed, Apr 20th 2011 3:31am — Mike Masnick

If you talk to folks in the recording industry, they seem to insist that Grooveshark is absolutely illegal. However, the company has structured itself in a way that it believes is perfectly legal -- which is why it's now upset that Google and Apple have each pulled its mobile app from their marketplaces and has issued an open letter, explaining why it's legal and asking Google and Apple to let it back into their app stores.

First, the company makes the distinction between "licensed" and "legal":

First, there is a distinction between legal and licensed. Laws come from Congress. Licenses come from businesses. Grooveshark is completely legal because we comply with the laws passed by Congress, but we are not licensed by every label (yet). We are a technology company, and we operate within the boundaries of the Digital Millennium Copyright Act of 1998 (DMCA). Some would have you believe that those of us who use the DMCA to innovate are inherently infringers and that claiming Safe Harbor under the DMCA is as good as admitting guilt. Not so.

The DMCA's Safe Harbor component encourages technology companies to innovate in hopes that they will eventually solve some of the problems that are plaguing content producers today. The Safe Harbor provision reads like it was written specifically for YouTube and Grooveshark, and its necessity continues to be illustrated every day. If it weren't for this notion, many of the products and services that are now taking a bite out of piracy would never have been born.

While I agree with the importance of the DMCA's safe harbors, and the idea that they are important to encourage innovation, Grooveshark is being a little misleading in the whole licensed/legal arena. It really should go into more detail. The way Grooveshark operates, is that (like YouTube), users upload content, which others can then stream. Grooveshark works to abide by the DMCA to discourage and takedown infringing material -- and notes that it has taken down 1.76 million tracks and suspended 22,274 users who abused the system. As it notes, those are "not the characteristics of a company 'dedicated to copyright infringement.'" It also pays performance rights organizations for the streaming content.

The real issue is whether or not the users have the rights to upload the works. That's where the licensing aspect comes in. Grooveshark has been trying for a while now to get record labels to agree to effectively offer a blanket license to its users, so that they can upload those songs, and the labels can then make some money off of the usage as well. In some ways, it's like YouTube's ContentID system, in helping labels monetize their music that users are hoping to share. Both EMI and Universal Music have sued Grooveshark, with EMI dismissing the case after agreeing to a license. Universal Music is still fighting the lawsuit.

So, effectively, the way Grooveshark is structured today is that its users might infringe on copyrights, and the company keeps seeking licenses that would make those uses authorized. The somewhat open legal question is whether or not Grooveshark itself is liable as well. It claims that it follows the DMCA safe harbors and is protected (and, for that reason, I'm sure is very, very, very interested in the eventual outcome of the YouTube/Viacom lawsuit concerning the overall contours of the DMCA safe harbors). The labels, I'm sure, claim that Grooveshark is "inducing" infringement through its overall design.

Not surprisingly, I think Grooveshark presents an interesting legal situation, which should be legal under the DMCA. Unfortunately, the courts often get a little wacky when it comes to interpreting the law in these situations. If YouTube continues to prevail over Viacom, Grooveshark is in a much stronger legal position. If the appeals court reverses, however, it may have more trouble. Of course, given all this, it is somewhat amusing that Google would dump Grooveshark, suggesting a violation of its terms of service. If Google is arguing that YouTube is legal, you would think it would recognize that Grooveshark relies on the very same line of legal logic.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: copyright, dmca, legality, licensing, safe harbors
Companies: grooveshark, youtube

18 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

The eejit (profile), 20 Apr 2011 @ 3:42am

Remember, you get what you pay for. And Universal have paid a lot of money to protect the "customers" from "piracy".
[ link to this | view in chronology ]
alex (profile), 20 Apr 2011 @ 4:54am

heh, good point. It does seem a touch hypocritical of google.
[ link to this | view in chronology ]
Lutomes (profile), 20 Apr 2011 @ 4:54am

I have used Grooveshark a few times before, and I can honestly say that I did not know that the source of its music was user uploads. But reading this now does explain a few things.

Personally I use Last.FM, and while this is no way intended as a plug - here goes.

The 2 things I though were odd about Grooveshark were firstly how on earth could they allow full custom playlists from every song out there. Other online streaming services (Last.Fm/Finetune) only let you "narrow down" your selection of tracks and let you play tracks in a "radio" style playlist.

With Grooveshark I could put 1, 25 or 100 tracks in the exact order I wanted playback. They could be of the same artist, or from all over the place. The other "radio" services didn't let you do that.

Secondly, I did notice a lot of Grooveshark tracks that were labeled with "Track Name - www.obviouslypiratemusicsite.ru" so I thought they might have been using a "search engine" type loophole.

Now I know why, it was user uploads from the pirate sites just to promote their junk.

Strictly speaking as someone who is happy to pay for Last.FM (or a similar price for any other music subscription radio service) $3 a month is reasonable for radio. I would pay $5-10 a month if Last.FM did better/full playlists and offline playback (i.e. let me load up my mobile with tracks that I can play radio style).

Stunts like Grooveshark pull only harm the streaming music "name", making it harder for legit companies to get licenses.

An example of the ridiculous nature of the licensing agreements. In Australia not only do I have to pay $3 a month for Last.FM (no free sreaming like US/UK/Germany) I can't stream music on my Android phone like the US/UK/GER users can because apparently that is a "separate license" that Last.FM has to negotiate with the labels here.

So if I use my web browser on my mobile I can listen. But Last.FM can't allow their official app to do the same or they will get the pants sued off them. Sigh...
[ link to this | view in chronology ]
Billy Wenge-Murphy (profile), 20 Apr 2011 @ 5:31am

I don't know if people know this - this might be secret information that only I possess - but anybody can make music. Record labels don't own the concept of music itself. An MP3 file cannot automatically be assumed to belong to one of the members of the music oligopoly, simply because they have gobbled up so many millions of pieces of intellectual property into their portfolio.

But this is probably quite esoteric knowledge that I'm descending from my ivory tower with and bestowing on the commoners....
[ link to this | view in chronology ]
Shon Gale (profile), 20 Apr 2011 @ 5:50am

Nobody knows! Really, nobody has a clue. I have been reading posts here for 2 years and responding and we are no closer to a solution in solving the copyright issue. The problem has become so prevalent that we here haven't written any new music or tried to record or upload even our own music because of our fear. Paranoid! Maybe! But all I know is Homeland Security now tracks how much I pay for rent, has to be notified every time I fill a prescription for a pain killer and has basically intruded completely into our lives. We can't fly because we are medical. We can't even comfortably go to another state because of our Medical status. I want a new country, screw the record companies, who cares what they do, they've have been stealing from their artists for decades. I just want a new federal government and a new system entirely. Of course just leaving me alone to live my life and let me create in peace would suffice, but still would not solve the problem.
[ link to this | view in chronology ]
- monkyyy, 20 Apr 2011 @ 4:15pm
  
  Re:
  +2 insightful
  [ link to this | view in chronology ]
Anonymous Coward, 20 Apr 2011 @ 8:42am

"and notes that it has taken down 1.76 million tracks and suspended 22,274 users who abused the system."

and this is one reason why copy'right' needs abolition. Doing all this costs time and money for no good reason, it makes these services artificially more expensive and scarce, and it reduces what these services have to offer. The public ends up paying one way or another. Abolish copy'right'.
[ link to this | view in chronology ]
- Kaity, 22 Mar 2012 @ 4:43pm
  
  Re: Copyright is Necessary
  To abolish copyright would end music, paintings, movies, novels, plays etc. entirely. Who wants to spend their time, money, effort, and life creating these works of art and then not get paid for it? The artists out there need to make a living too. Though I'll admit that it's ridiculous that movie tickets, music downloads, art works, novels etc. cost so much, it doesn't make stealing okay. How would you feel if you went to work every single day and didn't get paid for it because your work isn't actually considered "yours"? Imagine writing something for years and then people reading it for free without you ever getting a dime. It sucks. Copyright is necessary. That's the problem with our world today, everyone wants everything for free. You can't have everything handed to you.
  [ link to this | view in chronology ]
  - slap this bitch, 14 Apr 2012 @ 5:20am
    
    Re: Re: Copyright is Necessary
    The laws need to be adjusted not changed. Have you not heard of traditional music? Why the fuck do people keep passing that shit on? If we got rid of the bullshit copyright laws regarding music, it would not only get better but exist as strong as always. The real heads will always make the music, fuck all of you trying to make a buck.
    [ link to this | view in chronology ]
  - Copyright isn't neccessary!, 14 May 2013 @ 10:56am
    
    Re: Re: Copyright is Necessary
    Copyright isn't necessary at all! At least regarding music. You know how much money atrtists get from album sales? According to Brian Reed from investigatinganswers.com, artists get 1 dollar for every ten dollars the greedy record companies make- which aren't even necessary in the first place. But since they now control music advertising making it near impossible for people to get noticed without the help of the record company oligarchy, they're sucking money out of our pockets. Artists get their money from touring, and that's how it should be. Let downloadable music be free! Or at the least, have it free to listen to as long as you have an internet connection (as if you used grooveshark or something) but if you want to take the music with you everywhere (like an Ipod library) x amount of money for x amount of songs as long as it's less than this itunes 1 dollar 1 song overpriced bullshit
    [ link to this | view in chronology ]
MrWilson, 20 Apr 2011 @ 9:07am

"The labels, I'm sure, claim that Grooveshark is "inducing" infringement through its overall design."

Of course Grooveshark is inducing infringement through its overall design. Its design allows people to listen to music. Listening to music is a de facto violation of copyright!

Here, I'll write you a (bad) haiku:

Off in the distance,

you hear the music playing?

Copyright stealer!
[ link to this | view in chronology ]
PrometheeFeu (profile), 20 Apr 2011 @ 11:22am

Mike, I am worried about you developing RSI. I highly suggest you create a keyboard shortcut for "X is claiming that Y induces infringement". That should cut down on the typing you do significantly. Alternatively, we could lobby for a new HTML tag which could be expanded to "X is an evil pirate who is being taken down by Y" by IE or expanded to "Y is full of shit" by Firefox.
[ link to this | view in chronology ]
Daylyn (profile), 20 Apr 2011 @ 10:04pm

GrooveShark is also used by smaller bands as a way to get their name out. It offers services to monitor how many people are listening to your music.
[ link to this | view in chronology ]
DMCAexpert, 3 May 2011 @ 9:17am

Grooveshark may be wrong
The article and letter do not address the specifics of the lawsuit. The DCMA only covers post-1972 music. Grooveshark's blog has a post on 12.29.2010 that asks users to post a letter to the copyright office to amend the law. Currently pre-1972 media fall under each individual states laws, and the lawsuit is involving music by the likes of Buddy Holly, Chuck Berry, Marvin Gaye, the Temptations, Cat Stevens, the Jackson Five and the Who. Hopefully UMG can follow EMI's lead and settle with a licensing deal.
[ link to this | view in chronology ]
GoogleIsSmart, 4 May 2011 @ 11:36am

Google May Be Making A Smart Move
There is a distinction in the copyright law between those who distribute technology that has substantial non-infringing uses and also has infringing uses and those who distribute technology that induces copyright infringement. One of the issues with the DMCA safe harbor rule is whether it protects all technology that complies with its rules or whether someone who induces infringement can still be found secondarily liable as Grokster was. Grooveshark is pretty clearly inducing infringement, in my opinion. YouTube, on the other hand, has substantial non-infringing uses and does not promote itself as a way to listen to copyrighted music like Grooveshark does. I would not be surprised to see Google argue that YouTube is not an inducer so whether the safe harbor protects inducers or not, YouTube should be protected.
[ link to this | view in chronology ]
adam, 20 Aug 2011 @ 8:25am

Recall Napster...
In 2001, Napster was found guilty of both Contributory and Vicarious Copyright Infringement. While Grooveshark has not 'directly' contributed to infringement, they are undoubtedly guilty of Vicarious infringement.
Straight from wikipedia:

Addressing the vicarious infringement claim, the court then considered the necessary factors: whether Napster benefited financially from the infringement and whether they were capable of supervising and controlling infringing conduct. The Ninth Circuit sided with the District Court, who held that the infringing activity was a draw to potential users and that, since and Napster's future business model was predicated on expanding the number of users, Napster stood to benefit financially from the infringing activity. As for supervision, the Circuit court agreed in part with the District Court's finding that Napster had "the right and ability to supervise its users' conduct."[1] However, the Ninth Circuit felt that Napster's ability to patrol and enforce infringing use was limited by the design of the system itself. The system was not designed to read the contents of MP3s or check for copyright ownership or permissions, only to index by name and ensure they are valid MP3 files. Despite this departure from the District Court's reasoning, they argued that these indices and infringing files were just as searchable by Napster as they were by the plaintiffs in locating infringing files for evidence in the case. Because of Napster's failure to police within its means combined with the financial interest factor, the Ninth Circuit affirmed the District Court's finding of vicarious infringement.[1]

Grooveshark both:
1) Benefits from the infringement with its expanding user base that relies on the infringing library.
2) Does not(without a takedown request) maintain or scan its library for infringing files. Universal Music Group, who is suing Grooveshark in NY for the pre-1972 files on the libary, owns the copyrights to almost 25% of Grooveshark's libary, and has not received a penny in the three years of Grooveshark's growth. Even today, tracks EMG artists like Eminem can be found in unlicensed abundance on Grooveshark, which directly profits and gains a use base from.
[ link to this | view in chronology ]
Daniel, 1 Mar 2012 @ 12:37pm

If the major labels had their way, MP3 players and digital recording/reproducing technologies; indeed, computers at large would simply just be banned. We'd be back in the 80s buying 7" vinyl singles and listening to label dominated radio stations to hear our music. At some point the labels need to understand that people need to hear their music if they're actually going to buy it. The internet has unlimited potential as a distribution system. An album on Grooveshark is hardly the same as the CD in my hand. If I like what I hear online I will go out and buy the far superior quality hard copy. Yet all the labels seem to be interested in is in milking every last cent & restricting access if they can't immediately do so. Weird.
[ link to this | view in chronology ]
- D10S, 13 Mar 2012 @ 1:12am
  
  Re:
  it's called being stupid at doing bussiness
  [ link to this | view in chronology ]