The Second Circuit has reinstituted a jury verdict for nearly $50 million in the long-running litigation between MP3Tunes, the discontinued online music service, and a group of record companies. In a landmark ruling on October 25, the Circuit reversed the trial court’s determination that MP3Tunes was largely protected by a provision in the Digital Millennium Copyright Act (DMCA).
In a 2014 decision, Judge Pauley of the Southern District of New York previously ruled that, notwithstanding a jury verdict to the contrary, MP3Tunes’s activities largely fell within the DMCA’s “safe harbor,” which protects online service providers from copyright liability due to user-uploaded content as long as those providers meet certain conditions.
In their October 25 opinion, the Second Circuit construed that provision more narrowly and held that the jury had sufficient evidence to find that MP3tunes’ founder, Michael Robertson, had been “willfully blind” to infringement or had had “red flag knowledge” of it within the meaning of the DMCA. Those jury findings, the court found, precluded the application of the “safe harbor” provision.
In addition, the court found the DMCA requires that a service provider must “reasonably implement” a policy for removing the user accounts of “repeat infringers” in order to be eligible for “safe harbor” protection. Judge Pauley previously ruled that only users who knowingly, blatantly and repeately uploaded infringing content constituted “repeat infringers,” but the appeals court held that “all it takes to be a ‘repeat infringer’ is to repeatedly upload or download copyrighted material for personal use,” and “a ‘repeat infringer’ does not need to know of the infringing nature of its online activities.”
The plaintiffs had also argued that the District Court erred by applying the “safe harbor” provision to recordings created before 1972, claiming those recordings are protected by state, not federal, copyright law. The Southern District had ruled that the “safe harbor” applied to state-law copyright claims – the first time any court has considered the question. On appeal, the challenge to the lower court ruling was dismissed as “foreclosed” by the Second Circuit’s recent decision in Capitol Records, LLC v. Vimeo, LLC, which reached the same result as the District Court.
EMI Christian Music Grp., Inc. v. MP3tunes, LLC, No. 14-4369-CV RL, 2016 WL 6211836 (2d Cir. Oct. 25, 2016).
17 U.S.C. § 512.
Bill Donahue, 2nd Circ. Revives $48M Verdict Against MP3Tunes Founder, LAW360 (Oct. 25, 2016), http://www.law360.com/articles/855333/2nd-circ-revives-48m-verdict-against-mp3tunes-founder.
Mark Hamblett, Circuit Revives Copyright Case Against MP3Tunes, Founder, NEW YORK LAW JOURNAL (Oct. 25, 2016), http://www.newyorklawjournal.com/this-weeks-news/id=1202770732931/Circuit-Revives-Copyright-Case-Against-MP3tunes-Founder.