By , August 23, 2011.

Yesterday’s court opinion from the record labels’ lawsuit against “online music entrepreneur familiar with high-stakes copyright litigation” Michael Robertson’s latest venture is a mixed bag — no big win for either side, though plenty of little items of interest. 

Capitol Records v. MP3Tunes, Memorandum and Order, No. 07 Civ. 9931 (SDNY Aug. 22, 2011).

Background on MP3Tunes and this litigation:

Here’s a quick rundown of the court’s holdings on the cross-motions for summary judgment:

  • EMI’s claim against MP3Tunes and Robertson for contributory copyright infringement for songs described in takedown notices but not removed from users’ lockers is granted.
  • MP3Tunes’ DMCA defense for all other infringement arising from its service is granted.
  • EMI’s direct infringement claim against Robertson  for unauthorized songs added to his personal locker is granted.
  • EMI’s direct infringement claims against other employees for unauthorized songs in their lockers remain.
  • EMI’s infringement claim as to MP3Tune’s reproduction of album cover art on its site remains.
  • EMI’s state unfair competition claim remains.

Other observations:

Unsurprisingly, no “red flag” knowledge of infringement was found. As Ben Sheffner noted in last years’ Viacom v. YouTube decision, this level of knowledge triggers a requirement to takedown infringing content in order to qualify for the DMCA safe harbor yet has been narrowed by this court so much as to become almost a “dead letter.” Here, the court rejected EMI’s argument that even keywords like “file-sharing” are not the kinds of facts that should make infringement apparent to MP3Tunes.

MP3Tunes had tried to discount many of the songs at issue by arguing that EMI had registered the copyrights in them as “works for hire” but hadn’t provided proof that they were, in fact, works made for hire. Last week, the NY Times ran several articles about the looming battle over copyright termination. The big issue is whether or not many popular sound recordings are works made for hire; had MP3Tunes successfully made this argument, it could have foreshadowed the outcome of any litigation over terminations. However, a copyright registration creates a presumption of the validity of the facts stated within it. MP3Tunes had the burden to rebut that presumption, so although it raised the argument, it hadn’t provided any evidence to back it up, so the argument fails.

Perhaps MP3Tunes’ most audacious argument was that, since EMI made some songs available for promotional download on some third-party sites, it essentially authorized all downloads of the song from any site: essentially abandoning its copyright in those songs. This argument didn’t convince the court at all. It noted, “Far from proving EMI’s intent to abandon its rights, the record reveals that EMI placed careful restrictions on the use of its promotional songs and required consumers to visit certain websites or provide valuable marketing information before downloading a song.”

Following the court order, Michael Robertson brought up the tired false conflict between the music and tech industries,  remarking, “Few companies have been able to stand up to the record labels attacks and get rulings from the court on key issues relevant to the future of the internet music.”

It’s true that few companies that have operated with reckless disregard for musicians’ copyrights have gotten favorable rulings from courts. But it’s also true that many other companies which respect those rights have become successful. There are currently hundreds of legal online music services that include tracks from the major record labels. 1IFPI Digital Music Report 2011. The success of these services prove that everyone — creators, service providers, and consumers — can win.

Both EMI and MP3Tunes have indicated this litigation is far from over. Several issues remain to be resolved — and either side can appeal this ruling. The Second Circuit’s decision in Viacom v. YouTube is also pending — since that decision will deal with many of the same DMCA issues raised here, parts of this decision may have a short shelf-life.