Summary Judgments In MP3Tunes Case

Capitol Records, Inc. v. MP3Tunes, LLC, 1:07-cv-09931-WHP (S.D.N.Y. filed 8/22/2011) [Doc. 267].

"This case turns in large part on whether MP3tunes is eligible for protection under the safe harbors created by the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. 512."

The Court addressed Plaintiff's argument that MP3tunes failed to reasonably implement a repeat infringer policy. The court distinguished between "blatant infringers" and users who merely consume the content and found "this applies to MP3tunes executives." There was no evidence that executives or employees had firsthand knowledge that websites linked on the sideload.com website were unauthorized. Additionally, MP3tunes did nor purposefully blind itself to its users' identities and activities, and had a procedure for responding to DMCA takedown notices.

The Court next addressed MP3tune's compliance with Plaintiff's take-down notices. The court found that MP3tunes was obligated to remove specifice works traceable to users' "lockers" and that MP3tunes interpreted the reach of Plaintiff's notices too narrowly. However, MP3tunes was not obligated to take down all of Plaintiff's cotnent because the notices provided a representative list. Plaintiff had to provide sufficient information --additional web addresses -- for MP3tunes to locate other infringing material. "Absent adequate notice, MP3tunes would need to conduct a burdensome investigation in order to determine whether songs in its users' accounts were unauthorized copies. As discussed, the DMCA does not place this burden on service providers."

The Court next addressed actual or "red flag" knowledge of infringement. The Court found that MP3tunes "undoubtedly...is aware that some level of infringement occurs. But there is no genuine dispute that MP3tunes did not have specific 'red flag' knowledge with respect to any particular link...other than the URLs noticed [in the DMCA takedowns]."

The Court next addressed defendant's benefit and control of infringing activity, finding "at worst, MP3tunes set up a fully automated system where users can choose to download infringing content."

In sum, MP3tunes could claim safe harbor protection for plaintiff's works stored on and linked to on the websites. However, MP3tunes did not qualify for safe harbor protection for songs identified in takedown notices which it failed to remove.

The Court then turned to whether MP3tunes is secondarily liable for storing material at the direction if its users. The court found that MP3tunes knowledge of the unauthorized use of infringing material "is manifest." "Accordingly, [Plaintiff's] motion for summary judgment on its claim for contributory infringement with respect to the songs listed in [Plaintiff's] takedown notices and which MP3tunes failed to removed from users' lockers is granted."

The Court next turned to direct infringment. Plaintiff motion with respect to songs downloaded by employees was denied because there was a dispute as to whether the songs were downloaded by employees in the course of their employment. On the other hand, an individual named defendant was directly liable for the songs personally "sideloaded" from unauthorized sites.

LimeWire Damages in Trillions "Absurd"

Arista Records LLC v. Lime Group LLC, 06 CV 5936, NYLJ 1202486126807 (S.D.N.Y. Mar. 10, 2011)

The Court already had granted summary judgment in favor of Plaintiffs on their claims against Defendants LimeWire LLC ("LW"), Lime Group LLC ("Lime Group"), and Mark Gorton (collectively, "Defendants") for secondary copyright infringement. The Court found that Defendants had induced Multiple users of the Lime Wire online file-sharing program ("Lime Wire") to infringe Plaintiffs' copyrights. The litigation is in the damage phase.

Plaintiffs identified approximately 11,000 sound recordings that they allege were infringed through the Lime Wire system. For the over 9,500 post-1972 sound recordings, Plaintiffs elected to seek statutory damages under Section 504(c)(1) of the Copyright Act.

"Squarely before the Court is a threshold dispute regarding Plaintiffs entitlement to statutory damage awards against Defendants: Where, as here, Defendants have been found liable for inducing numerous individual Lime Wire users infringe Plaintiffs' copyrights, may Plaintiffs recover from Defendants a separate statutory award for each individual's infringement of a work as to which Defendants are jointly and severally liable? Or, rather, are Plaintiffs limited to one statutory damage award per work from Defendants, regardless of the number of direct infringers of that work with whom Defendants are jointly and severally liable?"

The Court held that Plaintiffs were entitled to a single statutory damage award from Defendants per work infringed.

If one multiplies the maximum statutory damage award ($150,000) by approximately 10,000 post-1972 works, Defendants faced a potential award of a billion dollars in statutory damages alone. If Plaintiff's were able to pursue a statutory damage theory predicated on the number of direct infringers per work, Defendants' damages could reach into the trillions. As Defendants noted, Plaintiffs were suggesting an award that is "more money than the entire music recording industry has made since Edison's invention of the phonograph in 1877." This result is absurd, the Court found.

In sum, the Court found that the most plausible interpretation of Section 504(c) is one that authorizes only a single statutory damage award per work against a secondarily liable defendant, particularly in the context of the mass infringement found in the context of online peer-to-peer file sharing. Accordingly, the Court held that Plaintiffs were entitled to a single statutory damage award from Defendants per work infringed, regardless of how many individual users directly infringed that particular work.