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In July, Aimee Mann brought a noteworthy lawsuit over the possible existence of a massive amount of unlicensed music being streamed online.
In the crosshairs of Mann’s multi-million-dollar legal claims was a company called MediaNet, originally backed by EMI, AOL, BMG and RealNetworks before being taken over by a private equity firm. MediaNet is essentially a white label that has served up more than 22 million songs to more than 40 music services, including Yahoo Music, Playlist.com, eBay and various online radio services.
Mann sued the company for allegedly infringing 120 of her songs, saying that a license agreement signed in 2003 expired three years later. There was also hint that she wasn’t alone. Her lawyer told The Hollywood Reporter at the time that the lawsuit served “as a call to other artists to follow the lead set by Radiohead and Pink Floyd to put an end to the unlicensed, uncompensated use of their music by online services.”
In reaction to the lawsuit, MediaNet maintained it had a valid license. On Friday, however, a California federal judge punched a big hole in that defense.
MediaNet’s argument to support a valid license was premised upon a provision of its agreement with Mann that purportedly granted it an ongoing statutory license even after the agreement’s termination. The company maintained that the provision allowed it to exploit Section 115 of the Copyright Act without having to serve notice.
But Mann’s attorneys responded by saying the provision applied to works “first made available” during the license term, and U.S. District Judge George King accepts the plaintiff’s argument.
“This is a reasonable interpretation of the License Agreement, and MediaNet has failed to argue otherwise,” writes the judge. “Accordingly, Mann has adequately alleged that MediaNet does not have a Section 115 compulsory license to use her pre-December 5, 2003 and post-December 4, 2006 songs.”
Mann’s three-year license also had a provision for automatic two-year extensions. The songwriter said her reps had sent a termination notice, and while MediaNet doubted the validity of her termination, Mann’s lawyers also argued that the auto-renewal provision was unenforceable under a bit of New York law that frowned upon such a thing without proper notice.
Judge King shrugs off MediaNet’s contentions that the law couldn’t apply to an intellectual property license and was intended to be a consumer protection statute, saying “the services rendered by MediaNet in connection with Mann’s property place it squarely within the scope” of the New York law.
MediaNet fares no better in escaping a charge of secondary infringement for allegedly causing others to infringe Mann’s works. The judge writes, “Because MediaNet’s service functions (and MediaNet profits) by distributing music to its business partners and end users, Mann has done enough to set forth plausible claims for secondary infringement.”
Only MediaNet’s motion to dismiss a rescission claim is granted. The judge has given Mann 21 days to amend the lawsuit, expressing doubt about whether Mann would be entitled to rescission of her contract if monetary damages could suffice. But the judge suggests a breach of contract claim might adequately be pled as an alternative.