Universal Music Group Wins Appeal Against Grooveshark

In a closely watched digital copyright lawsuit, a panel of five judges in the New York State Supreme Court of Appeals on Tuesday reversed a lower state court decision favoring Escape Media Group Inc., the operators of the music streaming site Grooveshark.

The lawsuit, filed by Universal Music Group, alleged that Grooveshark had violated copyrights laws by hosting unlicensed music from Universal’s catalog that was recorded prior to 1972.

The date is significant because recordings from 1972 and onward explicitly fell under the DMCA, which granted online service providers such as Grooveshark a “safe harbor” against copyright litigation, provided that they meet certain obligations, including a process for taking down infringing content uploaded by users.

The decision has the potential to send a number of social networks that rely on user uploaded content scrambling to scour their systems for copyrighted material recorded prior to 1972 in order to ensure compliance, including YouTube, SoundCloud and others.

“The Court’s decision, if it stands, will significantly undermine the Safe Harbor protections of the Digital Millenium Copyright Act and may severely disrupt the operations of all Internet Service Providers who, like Groovehark, permit access to user-generated music content,” Grooveshark’s attorney, John Rosenberg, said in a statement. “As a result, Grooveshark intends to appeal the Court’s decision and to seek legislative action on this critical issue, not only for its own interests but for the industry as a whole.”

Universal argued that, when it came to copyrighted songs recorded before 1972, Grooveshark enjoyed no such safe harbor and was liable.

New York State Supreme Court Judge Barbara R. Kapnick initially ruled in favor of Grooveshark in July 10, 2012. She cited a previous case, Capitol Records Inc. vs. MP3Tunes, in concluding that all songs, even those made prior to 1972, fell under the DMCA’s safe harbor provision.

However, Judge Kapnick’s ruling was reversed Tuesday when New York’s Supreme Court Appellate Division agreed with Universal.

When “the Copyright Act was amended in 1971 to include sound recordings, Congress expressly extended federal copyright protection only to recordings ‘fixed’ on February 15, 1972 or after,” the judges wrote.

Taking a literal stance, the judges said that if Congress had meant for the DMCA to extend to copyrighted material prior to 1972, it would have stated that in the law. Instead, the DMCA stated just the opposite, the court concluded.

“Under such circumstances, it would be far more appropriate for Congress, if necessary, to amend the DMCA to clarify its intent, than for this Court to do so by fiat,” the judges wrote.

Universal did not immediately reply to a request for comment.

Source: The Hollywood Reporter