Major Labels Easily Win Lawsuit Against Grooveshark

from the as-expected dept

Tue, Sep 30th 2014 8:42am — Mike Masnick

This isn't a huge surprise given how similar lawsuits have gone, but the various major record labels (including Universal Music, Sony Music and Warner Music) more or less won all of their arguments against Grooveshark in a ruling yesterday. As the ruling makes clear, Grooveshark's founders more or less sunk themselves into a deep, deep hole early on by effectively admitting that their plan was to encourage lots and lots of infringement to grow really big -- and then hope that the labels would eventually do licensing deals based on their size (which actually worked, ever so briefly, with EMI). The piles of evidence supporting the early actions of the company and its execs is pretty damning, and more or less undermines the company's later claims that it was really no different from YouTube. Just the fact that company execs specifically went and reuploaded songs that were taken down by DMCA notices is incredibly damning.

Basically, Grooveshark didn't even do anything to hide its attempts to infringe. There are cases where the evidence can be read in multiple ways -- including the Megaupload situation, where many of the charges against the company seem to involve taking statements out of context. But with Grooveshark, the evidence is pretty damning that the company and its execs not only knew that what they were doing was illegal, but actively sought to do more infringing things without regard to the legal impact of those decisions. Hell, the company's own DMCA alert system sent notices to tons of the company's own employees -- including top execs -- for uploading infringing works. On top of that, there was some suggestion that Grooveshark then sought to delete or hide the evidence of those uploads.

Basically, almost everything Grooveshark did was incredibly stupid under the law. And they got caught for it, and will now have to pay up.

Take, for example, this internal forum post one of the company's co-founders posted to everyone at the company:

Please share as much music as possible from outside the office, and leave your computers on whenever you can. This initial content is what will help to get our network started—it’s very important that we all help out! If you have available hard drive space on your computer, I strongly encourage you to fill it with any music you can find. Download as many MP3’s as possible, and add them to the folders you’re sharing on Grooveshark. Some of us are setting up special “seed points” to house tens or even hundreds of thousands of files, but we can’t do this alone… There is no reason why ANYONE in the company should not be able to do this, and I expect everyone to have this done by Monday… IF I DON’T HAVE AN EMAIL FROM YOU IN MY INBOX BY MONDAY, YOU’RE ON MY OFFICIAL SHIT LIST.

And there's this:

In 2009, Escape received numerous Digital Millennium Copyright Act (“DMCA”) takedown notifications from copyright holders demanding that it remove infringing copies of popular copyrighted songs from Grooveshark.... These ‘takedown’ notices threatened to diminish the Grooveshark music library.... As a result, Escape considered various methods so that users would not be denied access to any songs because specific infringing files were removed.... As part of this process, Escape’s senior officers searched for infringing songs that had removed in response to DMCA takedown notices and re-uploaded infringing copies of those songs to Grooveshark to ensure that the music catalog remained complete.

And then this one, on one of the co-founders (and the company's CTO) not just getting a bunch of DMCA notices (the ruling doesn't even get into the fact that it's obvious that the company's repeat infringer policy wasn't working, even if it was in place), but then having evidence disappear:

Greenberg received over thirty-nine DMCA notification letters from Escape for uploading 687 files to Grooveshark.... This means that Greenberg uploaded at least 687 sound recordings onto Grooveshark and that the UsersFiles should reflect these uploads....

[....]

Plaintiffs requested that Escape produce any archived copies of Greenberg’s uploading records and explain why his data was missing.... Defendants confirmed that no archived copies of Greenberg’s records exist.... Given Escape’s practices with respect to the creation and storage of upload data on the UsersFiles, Dr. Horowitz, plaintiffs’ expert, concluded that defendants deleted the uploading records associated with Greenberg’s account.

In most other cases like this, there are often important legal issues, and frequent attempts at distorting what actually happened. But in this case, it honestly looks like Grooveshark just flat out did everything possible to infringe on copyrights at every turn, directly encouraging employees to do so, and having a stated policy of trying to infringe as much as possible to get as big an audience as possible in the belief that the labels would then license. It didn't work and the company and its founders are going down because of it.

Umg Escape 140929Decision (PDF)Umg Escape 140929Decision (Text)

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
Companies: escape media, grooveshark, sony music, universal music, warner music

24 Comments

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

Reader Comments

The First Word

“

They clearly are in the wrong side of the law but this whole issue begs much needed questions:

1- If the service was popular (and it was) why don't the labels set up similar services and monetize on them (and instead try to actively kill the existing stuff like spotify or pandora)?

2- If it was doing good, why not strike a deal anyway and demand some money as compensation for the unlicensed days? Everybody wins.

3- Why is Grooveshark so vilified when the MAFIAA in general had to resort to piracy and infringement in their early days to take off? Would Grooveshark reach such size if they went the legal, standard ways? Can any service aspire to get big using the standard paths? (The answer here is clearly almost always no) If no, what are they waiting to open opportunities to more startups thus increasing their revenue channels?

We all know the answers and, sadly, they aren't good or reasonable.

—Ninja

”

Subscribe: RSS

View by: Time | Thread

Ninja (profile), 30 Sep 2014 @ 7:12am

They clearly are in the wrong side of the law but this whole issue begs much needed questions:

1- If the service was popular (and it was) why don't the labels set up similar services and monetize on them (and instead try to actively kill the existing stuff like spotify or pandora)?

2- If it was doing good, why not strike a deal anyway and demand some money as compensation for the unlicensed days? Everybody wins.

3- Why is Grooveshark so vilified when the MAFIAA in general had to resort to piracy and infringement in their early days to take off? Would Grooveshark reach such size if they went the legal, standard ways? Can any service aspire to get big using the standard paths? (The answer here is clearly almost always no) If no, what are they waiting to open opportunities to more startups thus increasing their revenue channels?

We all know the answers and, sadly, they aren't good or reasonable.
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 9:01am

Yeah... you don't get DMCA protections when your company is the one uploading the stuff in the first place. It's meant to protect third parties, not the ones actually doing the copying.
[ link to this | view in thread ]
jupiterkansas (profile), 30 Sep 2014 @ 9:31am

Re:
Isn't iTunes a similar service with licensed content that is very successful?
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 9:32am

Re:
Indeed. But the thing is, the major label could conceivably operate a system whereby everyone gains a little, rather than a privileged few gaining lots.

But apparently, that's economic heresy and/or COMMUNISM!!!
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 9:33am

mmm... wright wyrds
> As part of this process, Escape’s senior officers searched for infringing songs that had removed in response to DMCA takedown notices

... (sic) yes, but one bad sentence doesn't deserve another...

> It didn't work and the company and its founders are doing down because of it.
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 9:39am

However, plaintiffs have only established infringement claims for 4,053 recordings...

Accordingly, the court finds that plaintiffs are entitled to judgment as a matter of law that Escape employees illegally uploaded 1,800 additional files to Grooveshark.

Moreover, as it did above, see supra at 30, the court finds that Escape streamed a copy of each of the illegally uploaded 1,800 files 21,000 times.

Yikes. And it's all willful infringement. If you do the math, that's going to be some major damages. Millions of dollars as statutory damages, minimum. $500 million is perfectly possible. And the court found the company officers to be personally liable, so they can't just hide behind the corporation.
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 9:41am

Re: Re:
In short, no.

Itunes allows you to purchase music to stick it on your idevice.

Grooveshark is more akin to Spotify.
[ link to this | view in thread ]
jupiterkansas (profile), 30 Sep 2014 @ 9:42am

Re: Re: Re:
So isn't Spotify a similar service with licensed content that's very successful?
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 10:01am

and as per usual, the public looses out because the industries, being uninterested completely with trying to do something to encourage customers not to go to infringing sites, just laugh all the way to the bank and then sit back and wait for the next pot of gold that congress has arranged to drop into the laps!! i'm hoping their will be some changes made after the case where one of the labels has to show the way it's copyright notice and take down software works. it could prove useful in getting rid of the carte blanche that congress gave to the industries so suing others was almost a foregone conclusion, but there was no penalty when issuing false take downs!
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 10:02am

are doing down because of it.*

I think you mean *going* down.
[ link to this | view in thread ]
Antidirt, 30 Sep 2014 @ 10:23am

Mike Masnick just hates it when copyright law is enf-
*sound of head exploding*
[ link to this | view in thread ]
ACasey (profile), 30 Sep 2014 @ 10:23am

I can't wait for all the big business to censor all similar services, regardless of their legality, because of this.
[ link to this | view in thread ]
Get off my cyber-lawn! (profile), 30 Sep 2014 @ 10:32am

Dumb and Dumberest
When Harry and Lloyd ran an online music start-up.
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 11:10am

Re: Re: Re: Re:
Yup.
[ link to this | view in thread ]
rapnel, 30 Sep 2014 @ 11:54am

Who cares?
It's like the presidency - who cares who wins when we all loose regardless
[ link to this | view in thread ]
Kei, 30 Sep 2014 @ 1:17pm

Very sad....
...sigh just another way for me to *NOT* discover new music/bands. Grooveshark is the ONLY streaming music service I use. I have tried the other main streaming services but they never seem to have the music I listen to. No ability to make play list(s) or even to que up more than one song from a particular artist or album. I could share my playlist and favorites with my friends and in the process discover new music. I discovered so many new artists from Grooveshark. Very sad to see them go.
And don't even start with that Itunes BS. Very few overseas artist are up for purchase from Itunes, I gave up trying to access Itunes JP its impossible for me while living in the US.

On the plus side I did learn of many new artist on their own record labels, enough so that I will never buy ANYTHING from the major labels anymore. If you are not an independent artist... well, sorry I am no longer supporting your pimp aka.. major label anymore.

One more success story for the AA's ... and one more customer lost in the process.
[ link to this | view in thread ]
JP Jones (profile), 30 Sep 2014 @ 1:44pm

Re: Re: Re:
Technically iTunes sells DRM free music, so you can put on whatever device you want. It's the only part of Apple that I actually slightly agree with.

I won't use it, because a) it's Apple and b) Google Play All Access does everything I want (for now). But I do applaud the DRM free music; at least you're getting some actual value out of your $1.
[ link to this | view in thread ]
ECA (profile), 30 Sep 2014 @ 2:44pm

HOw much music is out there?
hOW MUCH MUSIC IS sTILL HELD BY THESE CORPORATIONS?..

Some of these corps have BOOKS of the recordings they have. And the prices are Outrageous..
There is Music you cant get from Any other source.
But HOW do you find it?
Anyone seen a Good sized Music store lately??
so WHERE is the access? Where is the Availability?
Placing Music in STORES is not good, as you CANT tell me what will sell, and what wont.
Iv found MORe at used Music stores, that I liked, then I Ever have at a general music store..

Music PLAYED is Music HEARD, Music Heard can be Music BOUGHT.
If you hear something you like, and can Get the Info on it, you will search for it, Find it, and BUY IT..
AND I DONT LIKE iTunes.. Just like radio, there are channels I DONT LIKE.
[ link to this | view in thread ]
Anonymous Coward, 30 Sep 2014 @ 5:47pm

Re:
Don't we all wish?
[ link to this | view in thread ]
Ninja (profile), 1 Oct 2014 @ 3:10am

Re: Re:
Backed by a multi-billion company. Try to start your own and tell us how it fares. (I'm not mocking you, just pointing to the issue)
[ link to this | view in thread ]
Lurker Keith, 5 Oct 2014 @ 7:55pm

Re: Dumb and Dumberest
I don't know about that. Wouldn't they just have Mockingbird on loop? Grooveshark was marginally more intelligent than that, not that that's difficult w/ those 2.
[ link to this | view in thread ]
vgiannell5 (profile), 30 Apr 2015 @ 6:31pm

I see MPAA getting their site shut down by the Anonymous group again.
[ link to this | view in thread ]
Anonymous Coward, 1 May 2015 @ 1:09pm

R.I.P. Grooveshark.
[ link to this | view in thread ]
alphasatori, 2 May 2015 @ 3:21am

"Only we may exploit the underlings," said the Major Labels. And it was good...for them.
[ link to this | view in thread ]