Universal Music sues MySpace over copyrights

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Universal Music Group and its publishing companies have sued MySpace and its parent company News Corp., alleging that the wildly popular site facilitates and encourages "rampant" infringement of thousands of UMG's copyrights.

The action, filed Friday in federal court in Los Angeles, seeks maximum statutory damages of $150,000 for each copyrighted work infringed either directly or indirectly and an injunction barring further infringing acts.

Said UMG in its suit: "The foundation of MySpace is its so-called 'user-generated content.' However, much of that content is not 'user-generated' at all. Rather, it is the 'user-stolen' intellectual property of others, and MySpace is a willing partner in that theft."

The action continues, "Notwithstanding MySpace's frank admission that it is 'unable,' i.e., prohibited by law, from offering its music and video services without first obtaining the permission of the copyright owner, MySpace has knowingly and intentionally operated its business on the fiction that it has obtained the licenses it needs from members that MySpace well knows are not the true copyright owners.

"MySpace harbors no illusion that the countless MySpace members who have posted these bootleg videos and pirated sound records to MySpace have done so lawfully. MySpace simply ignores its own admonition in its terms of use about first obtaining the permission of the copyright owner."

The suit cites U2, 50 Cent, the Black Eyed Peas, Mariah Carey, the Killers, No Doubt, Kanye West and Prince among dozens of acts whose recordings or compositions have allegedly been pirated on the site, which is described in the complaint as "a vast virtual warehouse for pirated copies of music videos and songs."

UMG notes that rapper Jay-Z's much-anticipated album, "Kingdom Come," which will not be released until Tuesday, already is "widely available for streaming and downloading on MySpace."

In a separate statement, UMG said: "Businesses that seek to trade off on our content and the hard work of our artists and songwriters shouldn't be free to do so without permission and without fairly compensating the content creators."

UMG -- whose chairman and CEO Doug Morris has been outspoken about his intention to protect the company's music against online infringers -- filed suit in October against peer-to-peer sites Grouper.com and Bolt.com, seeking similar damages (HR 10/18).

The UMG suit against MySpace was filed almost simultaneously with an announcement from the site that it planned to launch a tool that will make it easier and faster for copyright holders to remove content they allege is unauthorized.

The tool -- currently being tested with Fox and MLB Advanced Media -- will allow copyright holders to digitally flag any user-posted video containing content that they own and allege is unauthorized. MySpace would then remove any of the flagged videos.

MySpace recently announced a licensing deal with Gracenote implementing fingerprinting technology that would bar the posting of unauthorized music on the site (HR 10/31).

News Corp. acquired MySpace in September 2005 as part of a $580 million acquisition.

On Thursday, Fox Interactive president Ross Levinsohn, whose divisional oversight included MySpace, resigned (HR 11/17). His departure followed the Nov. 3 resignation of FIM chief operating officer Mark Jung.

A statement from MySpace about the UMG suit said in part: "We have been keeping UMG closely apprised of our industry-leading efforts to protect creators' rights, and it's unfortunate they decided to file this unnecessary and meritless litigation. We provide users with tools to share their own work -- we do not induce, encourage or condone copyright violation in any way.

"We are in full compliance with the Digital Millennium Copyright Act and have no doubt we will prevail in court. Moreover, we proactively take steps to filter unauthorized music sound recordings and have implemented audio fingerprinting technology. We will continue working to be the gold standard in protecting creators' rights as well as the world's leading lifestyle portal."

Several defendants in previous copyright-infringement suits have failed in attempts to shield themselves with the DMCA's so-called safe-harbor provision, which applies in situations involving the mere hosting of Web site material. The UMG suit claims that MySpace also reformats material "uploaded by their users in order to facilitate the further copying and distribution of such works to and by as many users as possible."

Ever since the U.S. Supreme Court sided with the studio in last year's MGM v. Grokster decision, it's considered scant defense to claim that a site also engages in the swapping of legal materials. But it could bear watching if MySpace uses its planned copyright-protection tool as a defense in the UMG suit.

"One question is whether it is sufficient to make the tool available to the content owner and make the content owner responsible to police the site," said Jeffrey Liebenson, an intellectual property attorney with the New York law firm of Herrick, Feinstein. "One of the raging controversies is whether the obligation to monitor infringing content is the responsibility of the content owner or the online user."

The matter also is at the heart of pending litigation involving some book publishers and the Google search site, Liebenson noted. Yet for all the technical arguments at the heart of the dispute, a judge could end up ruling on the UMG suit based on more simple fairness issues, he added.

"The Grokster case was a really good example of the Supreme Court using common sense and not getting all wrapped up in technicalities," Liebenson said. "They said there's something intrinsically offensive about what (Grokster) was doing."
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