Grooveshark Court Defeat Brings New Questions About Old Music

Marc Hogan

By Marc Hogan

Lead News Writer
on 09.30.14 in News

For the second time in a week, a federal judge has handed a digital music company a bruising defeat in a case involving music recorded before 1972. Yesterday, a court ruled that Grooveshark, a song-streaming service, infringed on the major labels’ copyrights millions of times. The decision came seven days after a judge found against SiriusXM in a separate copyright claim involving pre-1972 music. Like the SiriusXM ruling, the Grooveshark case could have broader implications for the business and listeners alike.

Thomas Griesa, a U.S. District Court judge in New York, wrote in his September 29 opinion that “evidence reveals no genuine issue of material fact” when it comes to the claims by major labels Universal Music Group, Sony Entertainment, Warner Bros. Records and their affiliates.

“The potential effects of the case could be pretty far reaching,” Stefan Mentzer, a partner specializing in copyright at law firm White & Case, told the New York Law Journal.

Last year, Billboard reported that the Grooveshark case could cause YouTube, SoundCloud and other user-uploaded content providers to scrub their systems clean of copyrighted material from prior to 1972.

According to the ruling, Grooveshark — listed in court documents under the name of parent company Escape Media Group — streamed copies of the labels’ recordings more than 36 million times. “Each time Escape streamed one of plaintiffs’ song recordings, it directly infringed upon plaintiffs’ exclusive performance rights,” Greisa wrote. The judge also found that Grooveshark illegally uploaded almost 6,000 of the labels’ copyrighted recordings.

Grooveshark has warned that a loss in this case could put it “out of business,” but the summary-judgment ruling’s implications go beyond a single company. As in the SiriusXM case, the issue is pre-1972 music. Federal copyright law covers only sound recordings made before February 15, 1972. However, a 2011 court ruling suggested that online music companies could still enjoy protections under the  the Digital Millennium Copyright Act, the federal copyright law that explains why interactive services such as YouTube will let you upload copyrighted material; they can avoid getting sued so long as they have a certain process for taking the offending material down when asked.

Judges have differed on whether this “safe harbor” applies to pre-1972 copyrights. In 2012, a New York state judge ruled in favor of Grooveshark, citing the 2011 precedent. Last year, an appeals court panel overturned the decision, paving the way for yesterday’s ruling against Grooveshark.

Still to come in the case is a decision on how much Grooveshark must pay the labels. Grooveshark lawyer John Rosenberg told The New York Times, “The company respectfully disagrees with the court’s decision and is currently assessing its next steps, including the possibility of an appeal.” Grooveshark also faces two other lawsuits. For music listeners overall, the more relevant question will be what ultimately becomes of vintage material they might want to upload or stream online.