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Why Cloud Music Services Are Breathing Easier

Just a couple of days ago, a federal judge in Manhattan exempted a cloud service provider form contributory copyright infringement (to the extent it followed the safe harbor requirements under the Copyright Act).  In essence, as long as the cloud service removes the materials after being notified by the copyright holder (and complies with other safe harbor provisions), they will not be liable for the infringement of their users/members.  This is a good time to remind service providers to comply will all aspects of the safe harbor provision.  If you do not comply with the safe harbor provision, you are ineligible for the safe harbor-look out stormy waters!  We’ll have a blog soon about these requirements.  For now, here is the statute.

In this instance (Capitol Records, Inc., et al. v. MP3tunes, LLC, et al.; Case No. 07 Civ. 9931 SDNY), Defendants operated a music service that (1) allowed users to upload their music to a personal cloud that could be played anywhere and on any supported device and (2) allowed for users to identify locations on the web where songs could be uploaded from. Plaintiffs served DMCA take-down notices on the Defendants.  One notice specified certain links containing infringing material.  Another notice, inexplicably required removal of broad swaths of information without specifying the location.

With respect to the first notice, the Court held it was sufficiently specific to allow infringing material to be identified.  In addition, the Court held that Defendants’ prompt removal of the links kept them within the legal safe harbor.  The Defendants, however, inexplicably failed to remove songs uploaded as a result of those links from users’ personal storage lockers.  For this, Defendants are liable and not protected by the safe harbor (which requires prompt removal).

Not surprisingly, the Court also held that the second notice, which did not specify the location of infringing materials, was insufficient under the DMCA.  I am unsure why copyright holders have not learned this lesson yet.

On the whole, it seems like a pretty balanced decision.  Service providers are not imputed with specific knowledge of copyright infringement, but must remove copyrighted works expeditiously when informed by a copyright holder.  Copyright holders must be specific about what they want taken down.

The text of the decision is here.

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