EMI Loses Yet Again In Its Quixotic War With Michael Robertson And MP3Tunes
from the the-definition-of-insanity dept
After losing pretty badly on most of the key legal points in its silly lawsuit against Michael Robertson and MP3Tunes, EMI doubled down and told the judge he made two mistakes in his initial ruling, and asked him to reconsider both. However, in an amended ruling (embedded below) Judge William Pauley has not only rejected EMI’s claims, but clarified his arguments even further, potentially making any appeal from EMI that much harder.
The two key points, as we discussed two months ago, were whether or not pre-1972 sound recordings were subject to the DMCA… and whether or not MP3Tunes really had a policy of dealing with repeat infringers. The pre-1972 issue is really, really important to the record labels. As we’ve discussed, pre-1972 sound recordings are not subject to federal copyright law, but rather more restrictive state copyright laws. Whether or not such songs are covered by the DMCA is a key element for the labels in planning their legal strategy. In Universal’s lawsuit against Grooveshark, for example, it’s just focused on pre-1972 songs, to try to cut off Grooveshark’s DMCA safe harbors argument. But the court goes into great detail why that’s a bogus argument, and that the DMCA’s safe harbors were clearly intended to cover all copyrighted works, even those not covered by federal copyright law:
EMI’s interpretation of 301(c) would eviscerate the purpose of the DMCA. “Where an examination of the statute as a whole demonstrates that a party’s interpretation would lead to ‘absurd or futile results … plainly at variance with the policy of the legislation as a whole,’ that interpretation should be rejected.” Yerdon v. Henry,…. As discussed, the DMCA was enacted to clarify copyright law for internet service providers in order to foster fast and robust development of the internet. Limiting the DMCA to recordings after 1972, while excluding recordings before 1972, would spawn legal uncertainty and subject otherwise innocent internet service providers to liability for the acts of third parties. After all, it is not always evident (let alone discernible) whether a song was recorded before or after 1972. The plain meaning ofthe DMCA’s safe harbors, read in light of their purpose, covers both state and federal copyright claims. Thus, the DMCA applies to sound recordings fixed prior to February 15, 1972.
On the second key issue, EMI’s filing for reconsideration sounded stronger, when only seeing EMI’s side of the story. It claimed that the judge misconstrued certain claims by Robertson and MP3Tunes employees, suggesting that the company didn’t really stop repeat infringers. However, it appears that EMI’s quotes were taken incredibly out of context, and the judge had no problem putting them back into context and seeing that MP3Tunes did, in fact, deal properly with repeat infringers. In fact, the judge points out directly that EMI “mischaracterizes” Robertson’s deposition testimony. Having a judge catching you trying to mislead him… is probably not good for your case.
But, perhaps even more importantly, the judge makes it clear that with a music locker like MP3Tunes, there’s no legal reason why the company should automatically cut off someone who is a repeat infringer, since all uploads are for personal use, and not to the wider internet.
Blatant infringers typically are those who upload or post unauthorized content, allowing others to experience or copy the work. See Viacom v. YouTube…. (finding reasonable a policy that terminated users who uploaded content after warning); see also 10 Grp., Inc. v. Veoh Networks … (same). The record reveals that MP3tunes’ users do not upload content to the internet, but copy songs from third-party sites for their personal entertainment. There is a difference between (1) users who know they lack authorization and nevertheless upload content to the internet for the world to experience or copy, and (2) users who download content for their personal use and are otherwise oblivious to the copyrights of others. The former are blatant infringers that internet service providers are obligated to ban from their websites. The latter, like MP3tunes users who sideload content to their lockers for personal use, do not know for certain whether the material they download violates the copyrights of others.
The court also reminds that even if MP3Tunes execs discussed some sites where people accessed files and moved them into MP3Tunes own storage, and questioned whether or not they were infringing, they had no way of knowing, officially, if those files were actually infringing:
For example, MP3tunes employee e-mails reveal discussions about the legitimacy of some third-party sites and, on at least one occasion, a recommendation that a site be removed from Sideload.com. But ultimately there is no evidence that MP3tunes executives or employees had firsthand knowledge that websites linked on Sideload.com were unauthorized. (See Bart Decl. Exs. 64-66.) While knowledge is not an element of copyright infringement, it is relevant to a services provider’s decision whether appropriate circumstances exist to terminate a user’s account.
This is important for a number of reasons too, including the standard claim from copyright system defenders, insisting that it’s “obvious” when something is infringing and sites should have to remove the content. As this court properly recognized, it’s not at all obvious. Content may appear to be infringing, but may have been uploaded by an authorized person. Or there may be fair use. Courts determine what is and what is not infringing — and random websites are in no position to do so, no matter how much the legacy entertainment industry likes to pretend otherwise.
Amusingly, in Robertson’s own blog post about this ruling (linked above), he suggests a reason for EMI’s decision to continue with this really pointless lawsuit: EMI exec turnover and upheaval is the perfect situation for lawyers to rack up billable hours, because no one’s paying attention:
From the outset, many have been puzzled by EMI’s decision to target MP3tunes as well as me personally with this lawsuit but it becomes clearer when one understands the chaos of EMI’s management and their relationship to an outside legal firm. An outside corporation performs all the litigation work for EMI. This firm doesn’t care if they win or lose the case because they get paid to fight. The more they fight, the more they get paid. This explains why in this latest move they went back to the same Judge with the same evidence telling him he got it wrong and asking him to reverse his findings. Unsurprisingly this rarely works, but it’s a chance for more billable hours and to increase their bills to more than $6 million. The fact that it actually makes an appeal more difficult for EMI is a plus because that means more time will have to be spent on those creating even greater riches for the attorneys.
Extensive turnover in EMI’s management means nobody is there to oversee the litigation costs or strategy. Currently EMI is owned by the megabank Citigroup who is likely unaware of the runaway legal expenses or fruitless strategy since they are concerned only with finding a buyer for EMI to get their multi-billion dollar investment back. The litigation firm senses this leadership vacuum and operates unimpeded taking every opportunity to drag out what is now a 4 year legal process with countless motions. An unlimited legal budget benefits only the lawyers not EMI. Maybe it will take a new owner to rein in the attorneys, but any objective analysis shows they are hurting EMI more than helping.