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Youtube Wins - MP3tunes (and Apple?) Cheer

Youtube Wins - MP3tunes (and Apple?) Cheer

Youtube prevailed in their billion dollar battle with Viacom who had accused them of copyright infringement. While Google (Youtube's parent), is surely pleased so are others who have similar services or are contemplating them. Here's some reasons to cheer this new legal development:

The law gives responsible net companies protection from copyright liability.

Youtube's defense is a law called the DMCA which protects companies on the net who engage in fundamental operations like caching data, operating search engines and storing material for users. They get this protection if they act responsibly by responding to takedown notices sent to them. This ruling affirms that words in the law are clear and they mean what they say.

All arguments about why Youtube wasn't protected were soundly rejected.

Viacom complained that Youtube does replication, transmittal and display which are not "storage". The Judge found that Viacom was defining "storage" too narrowly and that "providing access to information and material" was "basic, vital and salutary function". [He didn't explicitly say but he implied that storage would be meaningless if you couldn't retrieve the information once stored.]

Viacom said that Youtube didn't remove repeat infringers but the court found their policies to be reasonable.

Viacom stated that Youtube received a financial benefit directly attributed to the infringing activity but the Judge expounded that Youtube had to know of a "particular case" of infringing activity which they did not and therefore they did not receive a direct benefit.

Viacom protested that Youtube removes only the material in a takedown notice and not other clips that might infringe the same work. The Judge quoted extensively how takedown requests must include a URL or other specific information to locate the work.

West coast and East coast courts have reached nearly identical conclusions.

The Youtube case closely mirrors the Veoh ruling which involved a video hosting site based in San Diego. Universal Music Group sued Veoh for copyright infringement for hosting video files and Veoh used as their defense the DMCA. The Judge found in Veoh's favor in the 9th district (covering California). The Youtube case was in the 2nd district (covering New York) so there's similar thinking across the country. In fact the NY case cited the Veoh case 9 times.

More positive precedence for other net companies (like MP3tunes) accused of copyright infringement.

Major record label EMI is accusing my company MP3tunes of copyright infringement for both our cloud music storage and our search engine EMI's arguments parallel Viacom's against Youtube. Since we're in the same court house as the Youtube case we can now reference the Youtube ruling in our case which will bolster our position.

Others considering cloud music and video have been reticent but should now be emboldened.

I recently got a call from a reporter who was working on a story about how the legal uncertainty around music and video lockers was preventing many companies from investing in this area. That's understandable given the pending suits but the Youtube ruling adds clarity to the picture. I expect to see several new entrants - perhaps even Apple who needs a cloud music service to get music to all of their i devices without cabling up to the aging PC as an intermediary as they do now.

Appeals are on the horizon.

Precedence is definitely building with the Veoh victory and now Youtube's triumph. However, the losing side in both cases has vowed to appeal. UMG has filed the initial appellate brief but it was rejected as too long and they are in the process of refiling a shortened version. One would hope the appellate court has a similar analysis of these issues. With so much at stake for technology companies and media companies it's not unreasonable to project that one of these cases ends up in front of the US Supreme Court.

MP3tunes case filings are due in August, ruling later this year on personal cloud music?

After about 3 years we're nearly at a stage where the Judge gets an opportunity to hand down a ruling in the MP3tunes case (similar to what the Judge did with Youtube and Veoh). EMI has consistently asked for delays which has elongated the process (and made it more expensive). I think they hoped that it would exhaust our conviction or money as it often has with small digital music companies forcing a crushing settlement (imeem) or shutdown/bankruptcy (multiply, seeqpod). The delay has not shaken our resolve. We'll continue to battle for the right for personal cloud music. Thanks to all the MP3tunes customers who support us.


p.s. - MP3tunes is now offering 10GB free lockers. Sign-up on the invite list to get yours.

To discuss this topic with others, click here!

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