Judge Rejects Key Universal Music Argument In Legal Fight With Grooveshark

from the overreach... dept

Tue, Jul 10th 2012 2:42pm — Mike Masnick

Two and a half years ago, Universal Music (UMG) sued Grooveshark (or, really, its parent company Escape Media). The case has had a few twists and turns since then, but the judge has issued a ruling (embedded below) that is pretty clear in suggesting that Universal Music's key argument -- the the DMCA does not apply to pre-1972 songs -- was a massive overreach, and the court will not accept it. Separately, the court flat-out rejected UMG's attempts to have Grooveshark's counterclaims of tortious interference dismissed. There's no way to look at this other than a pretty big win for Grooveshark and a big loss for Universal, though the case is far from over.

On the key point, Grooveshark has long argued that what it does is really no different than what YouTube does, in that it allows individuals to upload content, and if it receives a takedown notice, it proactively follows the DMCA's takedown process and removes that content. Realizing that getting around the DMCA's safe harbors was a longshot, Universal Music instead reverted to a somewhat twisted argument, saying that pre-1972 sound recordings are not covered by the DMCA, and thus there are no safe harbor protections. To understand why they'd make this argument, you can read up on the history of pre-1972 copyrights for sound recordings -- a huge mess that the US Copyright Office is still trying to figure out how to fix. But, the short version is that, currently, sound recordings from before 1972 are not technically under US federal copyright law, but various (and often crazy) state laws. Since the DMCA refers to works under federal copyright law, Universal Music's arguments is that the DMCA doesn't apply, thus the safe harbors don't apply, and Grooveshark can't rely on its safe harbor compliance to avoid liability.

If this argument sounds somewhat familiar, that's because it's the same one EMI tried to use against MP3Tunes, which failed spectacularly. The NY state court in this case appears to be well aware of that, citing the MP3Tunes case at length.

An internet service provider which seeks to benefit from the safe harbor provisions of the DMCA is required, as a condition of receiving such protection, "expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity." .... Certainly the thrust of the DMCA is to relieve internet service providers of the initial need to ascertain the copyright status of the sound recordings that they make available, to place the burden of asserting copyright ownership on the owners of such copyrights, and to require the internet service providers to "take down" infringing material, upon receipt of a valid notice of infringement. There is no textual, or other reason, to think that Congress intended to limit that distribution of responsibilities to only post-1972 recordings.

Moreover, the phrase "copyright owners,".... is applicable to the owner of a common law copyright, no less than to the owner of a copyright under the Copyright Act....

End result? Sorry, UMG, but you can't just use this loophole to get around the clear and stated purpose of the DMCA's safe harbors.

This Court is not attempting to extend the Copyright Act to pre-1972 Recordings, but, nonetheless, does find, based on the relevant language of the statutes and the analysis discuss above, that the safe harbor provision codified by section 512(c)(1) of the DMCA is applicable to Pre-1972 Recordings.

That shoots a pretty big hole in UMG's case, as it's now going to have to show that Grooveshark's activities cause them to lose DMCA safe harbors, which is a much bigger hill to climb.

Separately, UMG failed in trying to get various counterclaims dismissed. The focus here was on claims that UMG contacted two companies -- HP and INgrooves -- to get them to back out of deals with Grooveshark. There are a bunch of different arguments (most pretty technical) that UMG makes to assert that these counterclaims should be dismissed, but the court isn't buying most of them. For each precedent UMG brings up, the court highlights that the facts are different here and UMG's reliance on particular caselaw "is misplaced."

UMG had a couple of relatively minor victories: having one of the counterclaims dismissed (one having to do with antitrust activity, because Grooveshark only showed harm to itself, rather than competition in general) and also a rejection of an attempt to use Section 230 safe harbors, which explicitly carve out intellectual property. Grooveshark/Escape Media tried a rather convoluted argument (sort of the reverse of UMG's pre-1972 DMCA argument, claiming that Section 230 safe harbors could apply to works covered under state copyright law). The court rejects this as silly, but it's effectively meaningless since it still grants the DMCA's safe harbors (which, admittedly are not quite as strong as the Section 230 safe harbors, but this is definitely the more reasonable result).

All in all, there's still a long way to go in this case, but today's ruling is clearly a pretty big loss for UMG and a win for Grooveshark.

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Filed Under: common law copyright, copyright act, dmca, safe harbors
Companies: escape media, grooveshark, hp, ingrooves, universal music

23 Comments

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Richard (profile), 10 Jul 2012 @ 3:17pm

Pre 1972 state law
Surely the constitutional copyright clause reserves the right to make copyright law to Congress. Therefore the state copyright laws are unconstitutional and can simply be thrown out.
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Anonymous Coward, 10 Jul 2012 @ 3:31pm

Good for grooveshark. bet they need a boost. The real action will be in the federal lawsuit. the one above has been an orphan suit since MP3Tunes.
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Anonymous Coward, 10 Jul 2012 @ 3:32pm

Re: Pre 1972 state law
Surely the constitutional copyright clause...

Curious argument. Of course, you understand that it's completely countered by history and precedent going back to the 1790s.

That is, while curious and interesting, your argument is legally frivolous.
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:Lobo Santo (profile), 10 Jul 2012 @ 3:35pm

Re: Re: Pre 1972 state law
Hey, don't you know the Gov is trying to quash all rumors of States' Rights and local State laws superseding Federal laws?!?

Get with the program!

Ah-hem: Richard, you're right, there's no way any State law could trump something Congress has done.
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Richard (profile), 10 Jul 2012 @ 3:47pm

Re: Re: Pre 1972 state law
Of course, you understand that it's completely countered by history and precedent going back to the 1790s.

I don't understand that - because it isn't true.

From: http://copy.law.cam.ac.uk/cam/tools/request/showRecord?id=commentary_us_1789

During the 1780s the shortcomings of local protection for writings and technological innovations in the context of an emerging national market and culture were becoming apparent, at least to some. The efforts of Noah Webster (1758-1843) and others to secure state protection for their writings vividly demonstrated these shortcomings in the instance of copyright.[3] The contest before state legislatures between John Fitch (1743-1798) and James Rumsey (1743-1792) over protection for the steamboat invention and the troubles of other inventors did the same in the patent context.[4] In 1787, in preparation for the constitutional convention, James Madison (1751-1836) identified "the want of uniformity in the laws concerning naturalization & literary property," as one of the weaknesses of the Articles of Confederation's scheme of government.[5] Later, when he defended the Constitution in the Federalist, Madison observed that "[t]he states cannot separately make effectual provision for either" copyright or patent.[6] In 1787 F.W. Geyer observed that "a patent can be of no use unless it is from Congress, and not from them till they are vested with much more authority than they possess at this time."[7] As it happened, when in 1787 a new scheme of government for the nation was created during the constitutional convention in Philadelphia, in the form of the U.S. Constitution, it included a new federal power to legislate in the field of copyright and patent.

Part of the motivation of the constitutional clause was to cut away the thicket of state copyright law. It is a pity that more recent judges have ignored that motivation and re-instated the mess.
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Anonymous Coward, 10 Jul 2012 @ 5:15pm

Re: Pre 1972 state law
Why the fuck does copyright even apply to pre 1972 songs? They should be in the public domain.
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Lozine, 10 Jul 2012 @ 5:43pm

Not as bad as the limewire suit.
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Anonymous Coward, 10 Jul 2012 @ 6:50pm

Re: Re: Re: Pre 1972 state law
The very first copyright case decided by the US Supreme Court: Wheaton v Peters (1834)

Mr Justice M'LEAN delivered the opinion of the Court.

. . . .

That an author, at common law, has a property in his manuscript, and may obtain redress against any one who deprives him of it, or by improperly obtaining a copy endeavours to realise a profit by its publication, cannot be doubted;

�.�.�.�.

It is clear, there can be no common law of the United States. The federal government is composed of twenty-four sovereign and independent states; each of which may have its local usages, customs and common law. There is no principle which pervades the union and has the authority of law, that is not embodied in the constitution or laws of the union. The common law could be made a part of our federal system, only by legislative adoption.

When, therefore, a common law right is asserted, we must look to the state in which the controversy originated.

�.�.�.�.

As before stated, an author has, by the common law, a property in his manuscript; and there can be no doubt that the rights of an assignee of such manuscript, would be protected by a court of chancery.
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Anonymous Coward, 10 Jul 2012 @ 7:37pm

Re: Re: Re: Pre 1972 state law
Another famous early case: Folsom v Marsh (Circuit Court, D. Massachusetts; 1841)

STORY, Circuit Justice.

�.�.�.�.

Unless, indeed, there be a most unequivocal dedication of private letters and papers by the author, either to the public, or to some private person, I hold, that the author has a property therein, and that the copyright thereof exclusively belongs to him.

�.�.�.�.

I hold, that the author of any letter or letters, (and his representatives,) whether they are literary compositions, or familiar letters, or letters of business, possess the sole and exclusive copyright therein; and that no persons, neither those to whom they are addressed, nor other persons, have any right or authority to publish the same upon their own account, or for their own benefit.
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Anonymous Coward, 10 Jul 2012 @ 8:11pm

"Certainly the thrust of the DMCA is to relieve internet service providers of the initial need to ascertain the copyright status of the sound recordings that they make available, to place the burden of asserting copyright ownership on the owners of such copyrights, and to require the internet service providers to "take down" infringing material, upon receipt of a valid notice of infringement. "

It's nice to see a judge state the clearly obvious, and to explain in simple terms why DMCA is an abject failure of copyright law.

It created a black hole, where copyright law does not apply - where the burden was shifted from the user to the rights holder, and requires the rights holder to police the entire universe on a daily basis in order to preserve their rights.

Further, it allows the offender to get away with it, by just "taking it down" after notice. This effectively makes the costs of policing a copyright to be 100% at the cost of the rights holder, even if they are the ones defending themselves.

Nice to see a judge put it so clearly. Perhaps you can put this on the top of Techdirt so everyone can remember that it's only the DMCA that makes most of the freebie internet possible.
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TtfnJohn (profile), 10 Jul 2012 @ 9:39pm

Re:
How nice to see you back again with your twisted reading of devices like safe harbours and, even better, fair use/fair dealing which is a concept that predated the internet by a couple of hundred years quite easily.

While the DCMA takedown process isn't perfect, nothing is, it strikes a reasonable balance between rights holders and user provided content policing of web sites.

I hate to burst your little bubble but it has always been up to the rights holder to enforce their copyright, police it in your words. No black hole has been created it's a continuation of what was there before.

The big complaint from (some) rights holders in the music biz and from the labels was that they had to police kids creating cassettes of their material and sharing or selling them. And that the penalties when they'd expended all the energy protecting their copyright were far, far too low.

Don't kid yourself. While it may not have been global it was happening on an enormous scale. The burden then was where it is now. On the rights holder. That's where it's always been since copyright came into effect.

Your imaginary black hole doesn't exist.

The take down notice is a way of enforcement.

For all your whining about the effort as you've discovered if your song is posted somewhere Google will tell you where almost the same afternoon. Cost is minimal.

The judge in this case makes no comment that would lead anyone to the conclusion that the takedown notice system has negated copyright in any way. He's explained the system and why it has come to be, in Reader's Digest compressed form.

To restate myself on fair dealing/fair use those concepts have always been there. They haven't just appeared with the DMCA.

Incidentally, according to physics, if this is a black hole then almost 20 years on the entire music industry, not just the labels, would have been pulled into the vortex by now and in either the spahgettification stage or well inside the black hole and getting completely squashed.

The music industry as a whole is doing quite well thank you. Even if that's something else you don't want to believe.

You have an odd view of this history and development of the Web and the Internet it runs on to say that safe harbours make the freebie Web possible. I'm assuming you mean freebie content which isn't entirely true but as for the Internet and the Web they were both intended to be as free as possible. Both are based on open source protocols, neither are encoumbered by patents. In fact acceptance of a new protcol by either forbids them to be patented.

Like it or not they're a tool. Not a hostile life form that wants to eat your music. Perhaps that will come with quantum computing and the quantum Internet and Web which some argue will take on the signs of intelligent life. They could then choose to eat you and your music or just ignore you in order to piss you off.

They'd also know how easy it is to piss you off. You have so many buttons to push. Most of which lead to irrationality even when you do have a good argument to make you do it so irrationally that you're ignored or someone points out that you're a few thousand bricks short of a load.
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Anonymous Coward, 10 Jul 2012 @ 10:19pm

Re:
You're also forgetting that the DMCA was put in place by copyright holders.

Why are you blaming Techdirt for this and not the copyright holders?
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G Thompson (profile), 10 Jul 2012 @ 10:30pm

Re:
Nice to see a judge put it so clearly. Perhaps you can put this on the top of Techdirt so everyone can remember that it's only the DMCA that makes most of the freebie internet possible.{emphasis added]

Oops. you seem to have fallen into a huge logic fail of your own making since you have just stated that in your opinion the DMCA creates most of the freebie (I am surprised you didn't use the word freetard - maybe you are improving somewhat) internet.

Except you have forgotten the huge elephant in the room, that being that only the USA is under the DMCA and the rest of the planet where the internet is thriving on all levels does not legally or in any other way come under the DMCA.

Care to comment on that or would you rather not dig yourself a deeper hole.
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PaulT (profile), 11 Jul 2012 @ 1:51am

Re: Re: Pre 1972 state law
The people who profit from the top 1% or so of songs that still sell from that era want to stay on the gravy train, and they can out-lobby those who aren't.
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Richard (profile), 11 Jul 2012 @ 1:58am

Re: Re: Re: Re: Pre 1972 state law
Did you read my link in full?

I think it addresses these points.
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Richard (profile), 11 Jul 2012 @ 2:01am

Re: Re: Re: Re: Re: Pre 1972 state law
In particular it seems that the US courts have inherited a bad precedent from the UK - which was later overturned or alternatively they have bad misread the ruling that overturned that bad precedent. Read the link and all is explained.
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Richard (profile), 11 Jul 2012 @ 2:10am

Re: Re: Re: Re: Pre 1972 state law
Huh - read your own link properly!

Further down it says

Congress, then, by this act, instead of sanctioning an existing right, as contended for, created it. This seems to be the clear import of the law, connected with the circumstances under which it was enacted.
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Anonymous Coward, 11 Jul 2012 @ 3:20am

Re:
The only thing shifted may be your brain cells towards the black hole inside your skull.

The burden of proof was always on the copyright holder never on users to prove anything and so was the cost of it.

Copycrap is a privilege, the burden is on the guy that wants a monopoly that is the least they could do.
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Niall (profile), 11 Jul 2012 @ 4:37am

Re: Re:
Serious +1 to this!

Not only that, but free content has always been available, and always will. All the DMCA does is helps reduce ridiculous trolling by media conglomerates with too much money and negative IQs against anyone they want to bully. And the fact that they abuse it so much with so little comeback just shows how poor it is even at that.
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Anonymous Coward, 11 Jul 2012 @ 7:38am

Re: Re: Re: Re: Re: Pre 1972 state law
Congress, then, by this act, instead of sanctioning an existing right, as contended for, created it. This seems to be the clear import of the law, connected with the circumstances under which it was enacted.

But this passage refers to the rights granted by the 1790 and 1803 acts. This decision explicitly distinguishes those from the author's right of first publication in his manuscript.

...but this is a very different right from that...

Your contention, remember, is that Goldstein v California was wrongly decided: You contend that Article I, Section 8, Clause 8 entirely prohibits the states from enacting legislation which secures rights to authors.

You contend that the Section 8 grant to the federal Congress implies a limitation on the states such as are found in Section 10.

As we have seen, in Wheaton, in 1834, Justice M'Lean had no doubt that an author had a property in his manuscript. This right is separate from the rights granted by the 1790 and 1803 federal statutes. It could not rise from the federal common law�the decision is that there is no federal common law. Therefore, to secure that right of authors, unsecured by the federal acts, we must "look to the state".

This demolishes your contention.
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Anonymous Coward, 11 Jul 2012 @ 8:12am

Re: Re: Re: Re: Re: Re: Pre 1972 state law
Your link does not address the fact that the framers knew how to write a limitation on the states when they wished to.

Article I, Section 10

No state shall...

No state shall, without the consent of the Congress...

No state shall, without the consent of Congress...

Those are limitations on the states.

But it has never been supposed that the Article I, Section 8 federal commerce power has entirely barred the states from regulating commerce at all.

Similarly, the Article I, Section 8 federal copyright power cannot be read to entirely bar the states from legislating in the field of copyrights�until and unless Congress has occupied all of the field�as it finally did in the 1976 Act.
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Loki, 11 Jul 2012 @ 9:28am

If UMG and others weren't allowed to extort money from customers/potential customers in bogus mass "settlement" lawsuits (I don't call them infringement lawsuits, because clearly they have no intention of prosecuting people as they do collecting money), ripping off their clients for fairly earned royalties, and other illegal, immoral, and indecent schemes, they wouldn't be able to afford to railroad potentially competing services into bankruptcy with frivolous lawsuits and appeals.

Regardless of the moral, ethical, or legal opinions of services like Grooveshark, Veoh, Megaupload or the likes, they pale in comparison to the major record labels and studios. Or to paraphrase a friend's comment I used last week on another post: "Dotcom may be an asshat and douchebag, but at least he's no Chris Dodd."

Because, quite frankly, if you are going to try arguing the moral high ground, you need to be standing on the moral high ground, and the RIAA/MPAA are so far from the top of that hill they haven't seen their own shadows in years.
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Anonymous Coward, 11 Jul 2012 @ 11:26am

Re: Re: Re: Re: Re: Re: Re: Pre 1972 state law
And that is relevant how since congress was found by the supreme court with the power to enact new copyright laws that apply retroactively to everything?
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