Grooveshark Insists It's Legal; Points Out That Using DMCA Safe Harbors Is Not Illegal
from the good-point dept
If you talk to folks in the recording industry, they seem to insist that Grooveshark is absolutely illegal. However, the company has structured itself in a way that it believes is perfectly legal — which is why it’s now upset that Google and Apple have each pulled its mobile app from their marketplaces and has issued an open letter, explaining why it’s legal and asking Google and Apple to let it back into their app stores.
First, the company makes the distinction between “licensed” and “legal”:
First, there is a distinction between legal and licensed. Laws come from Congress. Licenses come from businesses. Grooveshark is completely legal because we comply with the laws passed by Congress, but we are not licensed by every label (yet). We are a technology company, and we operate within the boundaries of the Digital Millennium Copyright Act of 1998 (DMCA). Some would have you believe that those of us who use the DMCA to innovate are inherently infringers and that claiming Safe Harbor under the DMCA is as good as admitting guilt. Not so.
The DMCA’s Safe Harbor component encourages technology companies to innovate in hopes that they will eventually solve some of the problems that are plaguing content producers today. The Safe Harbor provision reads like it was written specifically for YouTube and Grooveshark, and its necessity continues to be illustrated every day. If it weren’t for this notion, many of the products and services that are now taking a bite out of piracy would never have been born.
While I agree with the importance of the DMCA’s safe harbors, and the idea that they are important to encourage innovation, Grooveshark is being a little misleading in the whole licensed/legal arena. It really should go into more detail. The way Grooveshark operates, is that (like YouTube), users upload content, which others can then stream. Grooveshark works to abide by the DMCA to discourage and takedown infringing material — and notes that it has taken down 1.76 million tracks and suspended 22,274 users who abused the system. As it notes, those are “not the characteristics of a company ‘dedicated to copyright infringement.'” It also pays performance rights organizations for the streaming content.
The real issue is whether or not the users have the rights to upload the works. That’s where the licensing aspect comes in. Grooveshark has been trying for a while now to get record labels to agree to effectively offer a blanket license to its users, so that they can upload those songs, and the labels can then make some money off of the usage as well. In some ways, it’s like YouTube’s ContentID system, in helping labels monetize their music that users are hoping to share. Both EMI and Universal Music have sued Grooveshark, with EMI dismissing the case after agreeing to a license. Universal Music is still fighting the lawsuit.
So, effectively, the way Grooveshark is structured today is that its users might infringe on copyrights, and the company keeps seeking licenses that would make those uses authorized. The somewhat open legal question is whether or not Grooveshark itself is liable as well. It claims that it follows the DMCA safe harbors and is protected (and, for that reason, I’m sure is very, very, very interested in the eventual outcome of the YouTube/Viacom lawsuit concerning the overall contours of the DMCA safe harbors). The labels, I’m sure, claim that Grooveshark is “inducing” infringement through its overall design.
Not surprisingly, I think Grooveshark presents an interesting legal situation, which should be legal under the DMCA. Unfortunately, the courts often get a little wacky when it comes to interpreting the law in these situations. If YouTube continues to prevail over Viacom, Grooveshark is in a much stronger legal position. If the appeals court reverses, however, it may have more trouble. Of course, given all this, it is somewhat amusing that Google would dump Grooveshark, suggesting a violation of its terms of service. If Google is arguing that YouTube is legal, you would think it would recognize that Grooveshark relies on the very same line of legal logic.