Neither EMI nor MP3tunes may exist anymore, but the EMI v MP3tunes legal battle continues, and in doing so puts the spotlight on the obligations of technology companies which benefit from the so called safe harbours contained within American copyright law. As you may have noticed, safe harbours have been something of a talking point in the music industry of late, which means this long-running and at times tedious court case involving defunct companies is nevertheless of interest. As much previously reported, MP3tunes was an early-to-market music-specific digital locker service created by founder Michael Robertson. The record industry quickly called foul on the business on copyright grounds, initially testing the obligations of digital locker providers, though in the end much of the complicated copyright infringement lawsuit pursued by EMI actually centred on a spin-off link sharing service called Sideload.

The MP3tunes company went under during the litigation, but EMI – which became a Universal subsidiary in 2012 – successfully convinced the court to let it continue to sue Robertson personally. In 2014 he basically lost the case, and was ordered to pay mega-damages which eventually totalled $48 million, though a judge subsequently shaved nearly $7 million off that sum. Both EMI and Robertson then appealed the 2014 rulings. The Second Circuit Court Of Appeals has now provided its take on the various disputes that remain between the record industry and Robertson, and although the court doesn’t side entirely with either party, in the main the music business comes out better. This is important for the labels because precedents are arguably being set about the obligations of other technology companies dwelling in the aforementioned safe harbours. The safe harbour rule basically says that a company providing internet services which are then used by customers to infringe copyright cannot be held liable for that infringement providing they offer rights owners with a system by which infringing content can be removed and repeat infringers can be blocked. American law is a little vague on how exactly those takedown systems should work. US courts initially tended to set the bar quite low in terms of how good and helpful a takedown system should be, to the extent that is sometimes felt like a deliberately shoddy system could still be compliant with the law, though more recent cases have generally set a higher standard.

One issue in the MP3tunes case was quite how to define a ‘repeat infringer’. The company did block 153 users “who allowed others to access their lockers and copy music files without authorisation”. However, the industry argued that other users repeatedly linking to infringing content or accessing content via those links should also have been blocked. The appeals judge concurred with that wider definition of ‘repeat infringer’. In his discussion of the various arguments, judge Raymond Lohier writes: “Based on the available evidence, a reasonable jury could have concluded that it was reasonable for MP3tunes to track users who repeatedly created links to infringing content in the index or who copied files from those links”. He went on: “After all, MP3tunes had already tracked and removed 153 users ‘who allowed others to access their lockers and copy music files without authorisation’; by comparison, requiring MP3tunes to extend that policy to users who ‘sideloaded’ infringing content may not be an unreasonably burdensome request”. Though, in terms of precedents, perhaps a more important element of the MP3tunes case is the debate around ‘red flag knowledge’. Safe harbour dwellers in the US are required to respond to infringement or infringers on their network once made aware of such activity by rights owners, but also if there are “facts or circumstances from which infringing activity is apparent”. But what does that mean, and when should technology firms act to curtail infringement on their networks on their own initiative? The landmark ruling on this to date is Viacom v YouTube, which set the obligations of the technology providers pretty low. But in 2014, the jury ruled that MP3tunes did have ‘red flag’ knowledge about copyright infringement on its network that it should have acted upon, though the judge overseeing the case subsequently reversed that part of the judgement. However, the Second Circuit has now reversed the reversal. This is partly based on the fact that until 2007 the majors weren’t officially making digital music available in the MP3 format at all because you couldn’t apply digital rights management to that kind of file. Therefore Robertson and MP3tunes should have known that any links to any MP3 files of major label releases at that time were infringing copyright. Writes Lanier: “Robertson apparently knew that major record labels had not offered songs in MP3 format until 2007 … With respect to MP3s ‘sideloaded’ before 2007, therefore, the jury reasonably could have concluded that MP3tunes and Robertson were aware of ‘facts and circumstances that make infringement obvious’”.

Despite the Second Circuit rulings, this case is not entirely at an end just yet. According to The Hollywood Reporter, the whole matter will now go back to the judge who oversaw the original case, William Pauley, who will “square all that’s been decided, figure out the appropriate damages figure and, if necessary, set up another trial”. For now, the music industry has an influential judicial opinion that steps up the obligations of safe harbour dwellers, which is something it will like.

KEYWORDS: Repeat infringer, safe harbour, copyright infringement, Second Circuit.