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Judge Rules Grooveshark and its Founders are Guilty of Copyright Infringement

Postby sunnyd » Tue Sep 30, 2014 8:39 pm

On Monday, a judge found Grooveshark, a popular online streaming service owned by parent company Escape Media Group, Inc., together with its founders, Samuel Tarantino and Joshua Greenberg, guilty of copyright infringement. The judge said they were responsible for the illegal uploads of 5,977 songs by several musicians including Eminem, Green Day, Jay-Z and Madonna.

In a report by Reuters, U.S. District Judge Thomas Griesa in Manhattan pointed to "uncontroverted evidence" where there was direct infringement, which included a 2007 internal memo where Greenberg asked employees to "please share as much music as possible from outside the office" to speed growth.

In a 57 page decision, Griesa wrote, "By overtly instructing its employees to upload as many files as possible to Grooveshark as a condition of their employment, Escape engaged in purposeful conduct with a manifest intent to foster copyright infringement via the Grooveshark service."

Grooveshark was founded in March of 2006 by three undergraduates at the University of Florida, and allows users the ability to stream and upload music that can be played immediately or added to a playlist. Grooveshark displays songs, playlists, and users, and has a Java Web Start application that scans users' folders for MP3s, uploading and adding them to the user's online library. For the first two years of operation, Grooveshark operated as a paid downloadable music service. In 2008, the service enabled users to click and play songs on the site without having to download an application. On September 5, 2012 Grooveshark presented a full HTML5 player. In November of 2011, Grooveshark was a Mashable Awards 2011 Finalist in the Best Music Service or App category. The service describes itself on its website as "one of the largest on-demand music services on the Internet," with more than 30 million users sharing in excess of 15 million files.

Once considered a large competitor to LimeWire, the service has had issues with alleged copyright infringement and legality almost from the beginning. Yet despite numerous legal challenges, it continued operating and built a huge audience before the arrival of Spotify and other similar streaming services.

CEO Sam Tarantino said that the company had always strictly followed the takedown procedures of the Digital Millennium Copyright Act, stating that Grooveshark was usually expeditious to remove content upon notice. Representatives of the music labels said that as soon as the songs were taken down due to infringement claims, they often reappeared immediately.

In January of 2010, Universal Music Group filed a copyright infringement lawsuit against Grooveshark which alleged that Grooveshark maintained on its servers illegal copies of Universal's pre-1972 catalog. In July of 2012, New York State Supreme Court Judge Barbara Kapnick ruled that pre-1972 recordings were covered by the "safe harbor" provision of the Digital Millennium Copyright Act. In April of 2013, the New York State Supreme Court of Appeals reversed the decision, saying that pre-1972 licenses are not covered by the DMCA.

In November of 2011, Universal Music Group brought an additional lawsuit against Grooveshark for more than $15 billion. UMG cited internal documents revealing that Grooveshark employees uploaded thousands of illegal copies of UMG-owned recordings. Six individuals were named as personally having uploaded between 1,000 and 40,000 songs each; other employees had uploaded 43,000 songs, according to page eight of the complaint. For each of the 113,777 alleged uploads, a penalty of $150,000 was requested by Universal, amounting to an estimated $17.1 billion. Grooveshark denied all the complaints, stating that there was a "gross mischaracterization" of the documents obtained during the lawsuit's discovery phase.

As a result of numerous copyright concerns and pressure from record labels, many third party companies distanced themselves from Grooveshark. Apple removed its iPhone Grooveshark app from its store in August of 2010, in April of 2011 the Grooveshark application was pulled from the Android Market, and in May of 2012, Facebook removed Grooveshark "due to a copyright infringement complaint". At the end of April 2013, Google Search began censoring the "grooveshark" search term from its Autocomplete feature. Beginning in 2012, the British Phonographic Industry (BPI) engaged Phonographic Performance Limited regarding Grooveshark's licensing, and in November of 2013, attempted to have all UK ISPs block the website. In November of 2013, the Korea Communications Commission blocked the service. Grooveshark is still facing two other copyright lawsuits from the music industry, including the 2010 case concerning music recorded before 1972, which are covered under New York state law where the DMCA safe-harbor provisions do not apply.

In the decision reached on Monday, Judge Griesa found Grooveshark’s operators liable to nine record companies for having directed employees to upload thousands of copyrighted songs without permission. The plaintiffs in the case included Arista Music, Arista Records, Atlantic Recording, Elektra Entertainment Group, LaFace Records, Sony Music Entertainment, UMG Recording, Warner Brothers Records and Zomba Recording.

The next step of the case will be to set damages and Judge Griesa ordered both sides to propose within 21 days a permanent injunction to hold further infringements. It’s expected that Escape will appeal the ruling.

It’s quite likely that the ruling on Monday will open the door to a multimillion dollar damages suit from the record labels, who would like nothing more than to see the service shut down, citing with the service being allowed to continue, there would be the likeliness of file sharing services such as Grokster, LimeWire and Napster all of whom have already been shutdown because of copyright infringement.

And so the future remains unstable for yet another popular online service provider. There seems to be no end in sight for copyright lawsuits initiated by the music industry, and many of these recent cases are very likely to set a precedent for many of the future cases similar in nature. Just recently SiriusXM lost in a landmark pre-1972 recording royalties lawsuit, a case which is just the same as one of the lawsuits that Grooveshark is still facing in the days to come.

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