DMCA Safe Harbor Applies to Pre-1972 Recordings, State Trial Court Rules in UMG Setback
Sound recordings protected only by state copyright law nonetheless fall under federal jurisdiction when it comes to immunity provisions protecting Internet services, New York’s highest civil trial court ruled Tuesday. The New York Supreme Court decision came in a two-year dispute between Universal Music Group and on-demand streaming service Grooveshark. UMG said Grooveshark infringed its copyrights for recordings made prior to 1972, after which recordings fall under the federal Copyright Act. It’s the second loss for a record label on the applicability of the Digital Millennium Copyright Act’s safe-harbor provisions to pre-1972 tracks, with EMI losing on the point in U.S. District Court in New York last year in the MP3tunes suit (CED Aug 24 p6).
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The decision also amounted to a slapdown of the U.S. Copyright Office. It had protested U.S. District Judge William Pauley’s pre-1972 finding in the EMI case in a December letter to House Speaker John Boehner, R-Ohio. Grooveshark crowed over not only the pre-1972 finding but also the state court’s approval of its counterclaims to go forward against UMG for pressuring Grooveshark’s business partners to abandon it. We couldn’t reach UMG or the Copyright Office for comment.
There is “one relevant exemption” in Section 301 of the Copyright Act, which keeps pre-1972 recordings under state law, that favors Grooveshark, said the opinion written by Judge Barbara Kapnick (http://bit.ly/MfIRt2). She quoted Pauley’s EMI decision, which said that, “read in context,” one provision in Section 301 “does not prohibit all subsequent regulation” of pre-1972 recordings. Pauley had said the DMCA safe harbor doesn’t draw “any distinction between federal and state law,” and it’s “beyond dispute” that “copyright infringement” in common law “encompasses violations of both federal and state law.”
The “thrust” of the DMCA is to give Internet services certain immunities and obligations with respect to copyrighted works, and “there is no textual, or other reason, to think that Congress intended to limit that distribution of responsibilities to only post-1972 recordings,” Kapnick said. Her reliance on Pauley’s pre-1972 finding is notable because a copyright lawyer who has represented major content companies had told us the Pauley finding -- just a footnote in a long opinion -- wasn’t likely to be persuasive to the state court in the UMG case.
Kapnick’s ruling quotes from Register of Copyrights Maria Pallante’s letter to Boehner, attached to a Copyright Office report requested by Congress. “The fact that the term ‘infringement of copyright’ only refers to infringement of rights protected under title 17 [of federal law] ... could not be more clear,” Pallante had told Boehner, regarding Pauley’s reasoning in the EMI case. Congress should extend federal protection to pre-1972 works, she said, but “it is for Congress, not the courts,” to do that for both rights and limitations such as the DMCA Section 512 safe harbor. That drew a rebuke from Kapnick. “It is for the Courts to interpret the applicable statutes and decide the issues raised by this motion,” without extending the Copyright Act to pre-1972 recordings, the judge said.
Grooveshark lost on another one of its arguments, pertaining to its immunity under Section 230 of the Communications Decency Act (CDA). That section isn’t supposed to cover infringement claims but Grooveshark said in context it only applied to federal claims. Kapnick said the U.S. District Court in New York -- where Pauley sits -- had already decided in an infringement case against a similar streamer, Project Playlist, that Section 230 doesn’t cover infringement claims under either state or federal law because it refers to “any law” pertaining to intellectual property, which is “unambiguous language.” In doing so, Kapnick rejected a 9th U.S. Circuit Court of Appeals ruling against the adult publisher Perfect 10 which had said such a reading of Section 230 would “fatally undermine the broad grant of immunity” in the CDA.
Some of Grooveshark’s counterclaims against UMG were allowed to proceed under Kapnick’s ruling. That’s because UMG’s alleged pressuring of Grooveshark’s business partners to cut ties -- reserving the right to threaten litigation against those partners -- was not “incidental” to its infringement case against Grooveshark, the decision said. The Noerr-Pennington doctrine in federal law ordinarily absolves plaintiffs of liability for such actions, but UMG’s tactics were allegedly “an economic attack on the whole of” Grooveshark’s business, Kapnick said. Grooveshark alleged that UMG variously pressured Hewlett-Packard to drop an ad contract, INgrooves, to not give licensing to Grooveshark, and Apple to reject Grooveshark’s app for the iPhone. Kapnick allowed the claims related to HP -- a UMG partner in headphones -- and INgrooves -- which distributes a big chunk of UMG’s catalog -- to go forward.
The Kapnick decision -- “the latest in a series of important legal victories for Grooveshark” -- is significant “for this industry as a whole,” including YouTube and Pinterest as fellow companies that rely on user-uploaded content, Grooveshark said in a statement. Its approved counterclaims “raise serious questions regarding UMG’s past business practices,” Grooveshark said.