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No Safe Harbor for MP3tunes: Second Circuit rejects DCMA protection in EMI Christian Music Group, Inc. v. MP3tunes, LLC

Source: Grill IP patent news

second-circuit-dcma-protection-mp3tunesAfter a verdict in the EMI Christian Music Group’s longstanding copyright action MP3tunes, the Second Circuit has vacated a district court’s pretrial ruling that MP3tunes was eligible for Digital Millennium Copyright Act (DCMA) safe harbor protection, ruling against the lower court’s interpretation of DCMA’s “repeat infringer” policy requirement in EMI Christian Music Group, Inc. v. MP3tunes, LLC.

MP3tunes LLC was created by Michael Robertson, and it comprises two websites: MP3tunes.com, which provides a server for users to store their music, and sideload.com, which enables people to search for free music and upload songs directly to MP3tunes virtual storage “lockers.” Uploaded songs are added to sideload.com’s searchable songs index and made available to all users. This index contained infringing material, and MP3Tunes has been sued a several record labels in the past. In a prior motion for summary judgment, the parties disputed whether MP3tunes was qualified for safe harbor protection according to the Digital Millennium Copyright Act. This Act mandates service providers to have “adopted and reasonably implemented…a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.”

         In a 2011 summary judgment the district court ruled that MP3tunes reasonably applied a “repeat infringer” policy, likening repeat infringers to blatant infringers, and asserting that only users who upload songs knowing that such content is infringing can fall under the category of repeat infringers, and are subject to the terms of the policy. Looking to this interpretation, the district court held that that the defendants were able to receive safe harbor protection provided they adhere to all other DCMA requirements.

         The jury awarded $48 million to the plaintiffs, holding that MP3tunes had “red flag” knowledge of infringing activity on their websites. This effectively barred the defendants from safe harbor protection. The district court partially granted the defendants’ post-trial motion for summary judgment, holding that MP3tunes did not possess this “red flag” knowledge of infringement with regards to two categories of songs that the jury had found them liable for: any tune from the Beatles and MP3 files from major labels issued prior to 2007.

         This ruling was vacated by the Second Circuit, which rejected the lower court’s belief that only uploaders (not downloaders) could repeatedly infringe. This dependence on the infringer’s state of mind was rejected by the Circuit, which explained that “copyright infringement is a strict liability offense in the sense that a plaintiff is not required to prove unlawful intent or culpability, and a user does not have to share copyrighted works in order to infringe a copyright.” Rather, the Circuit held that a repeat infringer is simply someone responsible for continually uploading or downloading copyrighted songs for personal use. In line with this broader interpretation, the Circuit found that any reasonably jury could determine that MP3tunes had not implemented a reasonable repeat infringer policy, as “MP3 tunes did not even try to connect known infringing activity of which it became aware through takedown notices to users who repeatedly created links to that infringing content.”

         On remand, the court observed that ruling the defendants responsible for implementing a repeat infringer policy disqualifies the defendants from DCMA safe harbor protection. That said, the Circuit reversed the lower court’s ruling on the “red flag” knowledge concerning Beatles and pre-2007 work. Acknowledging that MP3tunes does not an affirmative duty to monitor servers for infringing activity, the court stated that “the jury was permitted to conclude that a time-limited, targeted duty—even if encompassing a large number of songs—does not give rise to an ‘amorphous’ duty to monitor contravention of the DCMA.”

         Lastly, the Circuit upheld the court’s ruling that the plaintiffs were permitted to one damages award per song, even if rights to the recording and composition of the song belonged to different plaintiffs. The ruling was affirmed in all other regards.

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