May 19, 2011 9:46am PT by Eriq Gardner
The RIAA Picks A New Legal Target (Exclusive)
The Recording Industry Association of America, fresh off a proclaimed "milestone" in securing $105 million in settlement money from file-sharing service LimeWire, has set its sight on the burgeoning cloud-computing world.
On Wednesday, the RIAA filed legal action against Box.Net, a service that purports to let its users share, manage and access business content. The trade group seeks to investigate a couple of the company's users believed to be using the service to infringe sound recordings.
Mark McDevitt, vp online piracy of the RIAA, filed a declaration to a California federal court supporting a subpeona request to be served on Box.Net.
Box.Net is one of a handful of companies that is growing in popularity in the cloud-storage industry. The company, which was founded in 2005 and received some of its angel capital from noted entrepreneur Mark Cuban, has been called the "Facebook of Cloud Computing."
An RIAA spokesperson explained that it's not a lawsuit per se, but rather a 512(h) subpoena as part of a routine pre-release investigation. "Too soon to tell what we might do with the information once it is uncovered," said the spokesperson, who added that it isn't a change in direction.
The RIAA's latest target of investigation will likely raise some eyebrows
Although cloud storage has gained traction, some facets of the business, including allowing users to upload and conceivably share content, are not very different from the file-sharing platforms like LimeWire that have been killed in the court system.
Box.Net and other cloud computing systems, though, allow users to do much more, so there's little dispute these services have legitimate uses. Still, if copyright holders intend to take their battles to these upstart companies, they've got a number of well-funded targets to pursue. Some of those companies like Dropbox have taken proactive steps to curtail any legal threats.
On the other hand, the RIAA might merely be interested in taking the results of the subpeona to file follow-up litigation against the revealed end-users of these services. But that also would be an interesting development. Famously, the RIAA sued some 30,000 individual users of file-sharing platforms a few years ago, but then ended the mass litigation campaign amid fanfare that it had realized a PR error.
Now that the RIAA has put its dispute with LimeWire to rest, what's next?
Box.Net also responded to the legal action.
"We take the confidentiality of our customers' information very seriously, but just like all other businesses, we are legally required to comply with court orders," said Box.Net in a statement to THR. "Our compliance will be limited to the information the court requires we produce. At Box, we're primarily focused on powering collaboration and information sharing within businesses, and it's rare that we run into copyright infringement issues in those instances."