1. YouTube Decision Muddies the Water for DMCA Safe-Harbor Law–for Now

    Part 1 of 2: Second Circuit on DMCA Safe Harbor: It’s Complicated

    Well, if you were hoping that the DMCA safe-harbor law would clear up with the Second Circuit’s long-awaited opinion in Viacom v. YouTube–that we’d get to the point where folks would know the contours of the safe harbor without having to consult with a lawyer–then last Thursday was, indeed, as Prof. Goldman put it, a “bummer.” There were things to criticize in last December’s Ninth-Circuit decision in Shelter Capital v. UMG (better known as the “Veoh case”), and certainly rights-holders were unhappy with it, but at least you knew where things stood. The basic lesson from Veoh was: comply with the DMCA notice-and-takedown regime, watch out for notices of infringement by non-rights holders, and things’ll probably be OK.

    But YouTube muddies the waters–at least, for a while. That’s not really meant as a criticism. Simplicity and “bright line rules” are nice because it saves business folks and consumers money (fewer legal fees) and worry. But an appellate court’s job is, in this case, to interpret a statute. Sometimes the best interpretation is also a complex or “fuzzy” one. True, lawyers are the main beneficiaries, but … Read More»

  2. UMG Swings for the Copyright Fences … And Misses Everything

    Ninth Circuit: It’s OK to Let the Public Access User-Uploaded Content

    I think by now you’ve read a few headlines about Ninth Circuit’s decision in UMG Recordings v. Shelter Capital, which is better known as the “Veoh case,” just before Christmas. Mostly, the headlines say something like: Veoh Dodges Universal Music’s Copyright Claims, or Universal Loses DMCA Lawsuit Against Veoh.

    But when you read the opinion, you should be struck by two things that have nothing to do with Veoh. First, Universal Music wasn’t just trying to get some compensation from a specific video site–it was trying to put video sites out of business. There’s no other way to explain the strategic choices Universal Music made. Second, as a result, in part, of Universal Music’s choices, the Ninth Circuit has just made Viacom’s life a lot harder for its case against YouTube.

    Understanding Universal’s Peculiar Legal Strategy

    If you’ve been reading my blogs on the DMCA defense (mostly in connection with the Nashville lawsuit against Grooveshark), you know that, even after 12 years, there are several very basic unanswered questions about DMCA safe-harbor protection. Off the top of my head, the most significant are:

    1. What does it
    2. Read More»

  3. Help Us Spotify; You’re Our Only Hope! (Part 14 of our Online Music Services Series)

    The Planets Align for the Music Industry. Will it Be Enough?

    In our last post, we examined the overlapping music-licensing regimes to explain, in part, why it took Spotify two years to get licensed in the U.S. We also looked at the music industry’s unhappy history with the internet, which also helped explain Spotify’s licensing struggles.  We now look at what Spotify means to the music industry’s future. A lot might be riding on Spotify.

    For all the technology firms looking to make money from music, consider how few of them even get as far as Spotify in being able to present the music industry a comprehensive internet-based scheme. A couple spring to mind: Rhapsody in 2001, and Apple in 2003.* This means that, when Spotify came calling, the industry actually had little practical experience on which to base a very perilous decision: how much to charge for music. Since the royalty rate is by far the biggest cost incurred by online music service providers–Rhapsody is said to pay 60% of its revenues in royalties, Pandora 50%–the royalty rate demanded by the music industry pretty much dictates the price of the product. Set it too high, and the service … Read More»

  4. Spotify: A New Hope (Part 13 of our Online Music Services Series)

    Or, the Attractions (and Distractions) of Licensing

    Spotify has been available in the United States for a few months now. Until the recent kerfuffle involving its Facebook integration, the reviews have been positive. If you review the features list with which we started this Online Music Services Series, you’ll see that Spotify comes as closer to giving consumers what they want than any other service. In fact, it’s not even that close:

    • Portability: check: with Spotify Premium, you can listen to longs off-line and you gain access to Spotify’s mobile apps.
    • On-demand: check: you can listen to any song you want to in either your or Spotify’s catalog;
    • Music discovery: half-check: Spotify has a feature that allows others to share music with you, which should help you discover music you like, but nothing quite as robust as Pandora’s Music Genome.
    • Extensive catalog: check: Spotify’s catalog has about 15 million songs.
    • Low cost: half-check: Spotify Free has all of the features above except portability; for that, you need to shell out $9.99 a month, and you lose all access should your subscription expire.*

    * If I were starting this series over again, I might have Read More»

  5. In Grooveshark’s Defense: Red Flags and Financial Benefit (Part 7 in our Online Music Services Series)

    Why Grooveshark Might Not Swim into the DMCA Safe Harbor

    In our last blog post, we examined two of the four main requirements for Grooveshark’s DMCA safe-harbor defense.  Those requirements were (1) having and implementing a repeat-infringer policy, and (2) compliance with the notice-and-takedown procedure.  We gave Grooveshark a pass on those two requirements.  We now look at the two remaining requirements:  (3) lack of actual knowledge or “awareness” and (4) lack of direct financial benefit.  We think these two requirements will be much trickier for Grooveshark.

    Knowledge and “Awareness”

    To qualify for DMCA safe-harbor protection, you (as the website operator) must (1) not have actual knowledge of the infringement,* (2) not be “aware of facts or circumstances” that make the infringement apparent, and (3) “expeditiously” stop the infringement, once you are obtain such knowledge or “awareness.”

    *  Want to hear something weird?  If someone sends you a defective DMCA takedown notice, but it includes enough information to put you on notice that infringing activity is going on, you are not deemed to have actual knowledge or even “awareness” of the infringement.  Although this is illogical, there’s a good reason for it.  Otherwise, there’d be no reason for copyright Read More»

  6. In Grooveshark’s Defense: DMCA Safe-Harbor Protection (Part 6 of Online Music Service Series)

    Is Grooveshark Just the YouTube of Music?

    Although Grooveshark has been sued now three times, it has not yet had to explain why it thinks its activities are legal.  After all, as we explained in our last two posts, its activities are infringing–but surely Grooveshark’s founders haven’t gone to the trouble of starting a business if they didn’t have some legal basis for what it does.  And, indeed, they do: they believe Grooveshark is the YouTube of music.  The idea is that, just like YouTube, users upload content and stream that content to their computers on request.  And, to the same extent what YouTube does is legal, so should be what Grooveshark does.

    By its nature, YouTube is always at risk of committing both direct and secondary copyright infringement.  Any time a user uploads a copyrighted work–from clips ripped directly from TV or DVDs to home-made videos of children dancing to Prince songs–YouTube would be subject to secondary liability.  Any time a user streams such content to his or her computer, YouTube would be subject to secondary liability.

    I say “would be” instead of “is” because YouTube isn’t* liable for these many instances of copyright infringement.  YouTube has … Read More»

  7. The Case Against Grooveshark: Streaming Trouble (Part 5 in our Online Music Service Series)

    Why Grooveshark Probably Needs a Defense or a License

    In our last post, we looked at the case against the “feeding end” of the Grooveshark, which meant we mostly discussed secondary copyright liability.  We’ll now turn our attention to Grooveshark’s “streaming end.”

    Generally speaking, there is at least one, and maybe up to three, exclusive rights implicated by streaming music (or other digital content) over the internet.  Everyone agrees that it constitutes a public performance.  It might also constitute a reproduction and a distribution–but we don’t know for sure because (1) most courts don’t reach the question, having stopped at public performance*; and (2) it might depend on the specific technology being used (which might be another reason courts don’t get into it!).  But we’re not a court–we’re a blog, so we won’t stop at public performance.  We’ll look at all three!

    Recall that you only need to prove infringement of one of the exclusive rights.  Proving infringement of additional exclusive rights doesn’t add anything, except perhaps insurance.  In this case, the public performance right is so clearly implicated that insurance isn’t really necessary.

    Public Performance:  It might not seem intuitive at first that streaming content over the … Read More»

  8. The Case Against Grooveshark: Uploading Trouble (Online Music Service Series, Part 4)

    Through the Grooveshark’s Jaws

    In my last two posts, we took an overview of copyright law as it applies to online music services, and at six of the major new such services.  We’ll now turn our focus to the specific services, starting with the inspiration for this series of posts, Grooveshark (which is currently a defendant in a lawsuit here in Nashville).  Grooveshark’s business model is so interesting, it’ll take three posts to get through it all.  Recall that Grooveshark has two interactive ends:  on one end, users are invited to upload music files; on the other end, those music files are streamed to users on demand.  This means there are two separate opportunities for infringement.  On top of that, Grooveshark relies on a complex defense, the DMCA safe-harbor.

    In this post, we’ll analyze the “uploading content” end of Grooveshark’s service.  In the next post, we’ll look at the “streaming” end.  And in the post after that, we’ll examine its DMCA safe-harbor defense.

    Uploading Content

    Right off the bat, we know that Grooveshark isn’t subject to direct liability for the “uploading content” end of its service.  That’s because Grooveshark isn’t doing the uploading; its users are.  But … Read More»

  9. Overview of the New Online Music Services: Part 3 of Our Online Music Service Series

    Seven Different Ways to Get Your Recommended Daily Requirement of Music

    This is the third installment of our series on the legal aspects of online digital music services.  We turn now to the services themselves:  here are thumbnail sketches of the six major new online music services.  For those not in widespread public release, our information is derived from press reports, rumor, scuttlebutt and innuendo.  When we start examining the services in detail, we’ll add links from here to the associated blog posts.

    Pandora OK, calling this “new” is a bit of a stretch, but it really kicked off this new way of listening to music.  Because it has a track-record of success, it’s a good measuring stick to set against the newer services.  Pandora is free with advertisements.  It does not play music on demand, but it does a good job of playing music you’ll probably like.  It operates by “streaming” music over the internet (but we’re not sure what sort of streaming is used or any of the specifics).  Pandora does not obtain licenses for its music directly from copyright holders but operates under the statutory “webcaster” license.

    Spotify Free/Unlimited:  In America, this is the newest such … Read More»

  10. Of Groovesharks and Big Fishes: the New Online Digital Music Services and Copyright (Part 1)

    Part 1:  Introduction:  Will Consumers Ever Get What they Want?

    As many you already know (from Brandon Gee’s good article in The Tennesseean), a group of local songwriters have recently sued the operator of Grooveshark for copyright infringement.  (You may view the complaint here.)  Grooveshark, of course, is just the tip of an internet digital-music iceberg.  In addition to Grooveshark, we have Pandora, Spotify and Amazon’s “music locker” service, and we are looking forward to the public release of Turntable.fm, Apple’s iCloud service and Google’s “music locker” service.  These services represent a pretty significant leap forward* over the forms of online music services that dominated the last decade:  Apple’s iTunes, Rhapsody and the various forms of peer-to-peer file-sharing services.

    We have banned the word paradigm from this series of blog posts.  Not every significant change in technology is a paradigm shift–not even if it takes place on the Internet!

    These new services are responding to consumer demand for greater flexibility in listening to music on-demand, while keeping costs low.  The ideal service might be a on-line “radio station” that played a wide variety of music on demand (i.e., plays your requests), while allowing the listener … Read More»

Rick and Tara are experienced lawyers who have set out to serve clients in a new way. Rick's roots reach back to his Silicon Valley home, where he first developed his litigation-oriented practice before moving to Nashville in 2004. Tara got her start in the music publishing business in Nashville in 1998 and has used that experience to form the basis of her transactional law practice since graduating from law school in 2004.
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