March 26, 2014 3:27pm PT by Eriq Gardner
MP3Tunes Founder Michael Robertson Slammed With $41 Million Jury Verdict
MP3Tunes founder Michael Robertson has been ordered by a New York jury to pay about $41 million in damages for massive copyright infringement.
The ruling on Wednesday comes a week after he was found liable in a lawsuit brought by Capitol Records, EMI and other record labels and music publishers. Reuters reports that verdict issued was complex and could take some time to figure out exactly how much was awarded. The record labels brought many claims over songs and cover art and there could be some nuance around a calculation of statutory damages and lost profits.
Robertson is expected to appeal the ruling.
Martin Bandier, Chairman and CEO of Sony/ATV Music, praised the ruling.
"Sony/ATV Music Publishing commends the jury on their careful consideration of the facts and their decision in theMP3Tunes.com case," Bandier said in a statement to The Hollywood Reporter. "The judicial process has worked in favor of the songwriter and demonstrated a respect for the copyrights laws. We will continue to vigorously pursue action against those who have disregarded the copyright laws of the works entrusted in our care.”
Here's what we wrote last week about the trial...
Robertson operated two websites, MP3Tunes.com and Sideload.com, that once boasted a catalog of more than 400,000 recordings by 40,000 artists. In some respects an early version of cloud services, Robertson's sites allowed its users to upload music, listen to music, and transfer or "sideload" music from third-party websites to storage lockers.
The plaintiffs brought the copyright case in 2007, the same year that Viacom sued YouTube. In its nearly seven years on the court docket, Capitol Records v. MP3Tunes became incredibly complex. Thanks in large part to the lawsuit, MP3Tunes filed for bankruptcy in 2012 with Robertson later challenging the court's jurisdiction over him. Further, Robertson attempted to raise all sorts of issues relating to whether the record labels had properly registered copyrights on their songs.
The judge in the case determined on summary judgment that MP3Tunes and Robertson were liable for direct infringement for personally uploading some of the songs in question, but the main trial drama revolved around issues of "willful blindness" and "red flag knowledge" with regards to thousands of other hit songs.
As explored in the recently settled Viacom v. YouTube case, the Digital Millennium Copyright Act provides safe harbor from copyright liability under certain conditions. Most famously, Internet service providers that respond expeditiously upon the actual knowledge that comes from takedown notices can claim a safe harbor defense. But then there are points where the immunity can be attacked including when a service provider is aware of a high probability of infringement and consciously avoids to confirm that fact or when a service provider has a right and ability to control infringing activity.
In 2012, the 2nd Circuit Court of Appeals addressed this in the YouTube case and hinted that something less than a DMCA takedown notice could trigger legal obligations.
Afterward, the judge in the MP3Tunes case withdrew his prior grant of summary judgment in favor of the defendants on the possibility they exhibited willful blindness and had red flag knowledge.
Robertson countered this triable issue with evidence that the record companies had distributed free songs online as part of marketing campaigns, which he believed might exonerate him as a innocent infringer. After all, perhaps his infringements didn't rise to the level of a standard known as what's "objectively obvious to a reasonable person."
Unfortunately for him, a jury came back with a ruling that MP3tunes was willfully blind -- a determination that will be cheered by the entertainment industry's fiercest copyright advocates. It's pretty much the exact outcome that Viacom had hoped to get against YouTube before abandoning the case.
Robertson, who was also the founder of MP3.com, successfully defended a few claims including ones over whether he should have removed files from users' lockers, but the trial now moves on to a determination of damages.