Grooveshark And Its Officers Liable For Copyright Infringment Based On Direct Uploads By Officers And Employees

UMG Recording, Inc. v. Escape Media Group, Inc. No. 1:11-cv-08407-TPG (S.D.N.Y. filed Sep. 29, 2014) [Doc. 100].

This case involved "Grooveshark" and the direct upload of plaintiffs' copyright music by defendant's officers and employees.  The Court granted plaintifss' motion for spoliation sanctions, and granted plaintiffs' summary judgment on nearly all of their claims.  As to spoliation sanctions, the Court found that defendants acted with a culpable state of mind when they deleted user upload information and relevant source code.  Based on the spoliation, the Court found that an individual defendant directly infringed plaintiffs' copyright recordings; however, the Court did not agree with plaintiffs' request that it find 10,000 instances of infringement and instead found that plaintiffs were entitled to judgment as a matter of law that that defendant illegally uploaded a small percentage (144) of the recordings.  Similarly, the Court found that the other employees uploaded a much smaller percentage  of additional files than requested by plaintiffs.

Turning to the summary judgment motion, the court first found that a certain expert report was admissible.  The Court then addressed defendants' affirmative defenses, and held that the claims were not barred by the statute of limitations, and that defendants' could not set forth a claim for equitable estoppel (or laches or waiver).  On plaintiffs' copyright claims, the Court found that plaintiffs established that defendants illegally uploaded 5,977 sound recordings (plaintiffs had requested a much higher number).  Accordingly, defendants were directly liable for infringement of plaintiffs' distribution, reproduction and public performance rights.  Further, Escape was liable for vicarious and inducement infringement because it had the ability to control its employee's infringing activity and instructed its employees to upload as many files as possible to Grooveshark as a condition of their employment.  Escape also materially contributed to the infringing employee uploads, and the Court granted plaintiffs summary judgment on their claim for contributory infringement.  The corporate officers were also liable., jointly and severally with the company.