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Grooveshark responds to ruling in Universal litigation

By | Published on Monday 6 October 2014

Grooveshark

Grooveshark has issued a statement following last week’s potentially crippling legal ruling which said that the digital firm was liable for copyright infringement for ordering staff members to upload unlicensed recordings to its servers.

As previously reported, Grooveshark is unpopular in many music circles because it lets users upload tracks to its library, meaning it routinely hosts a plethora of recordings without permission from the labels who own them.

However, Grooveshark says that under US copyright law it is not liable for copyright infringement because users upload the uncleared content, and it operates a takedown system via which labels can have files removed. Though users will then re-upload them. The labels, therefore, argue that the streaming service is exploiting a loophole in America’s Digital Millennium Copyright Act.

Though Grooveshark is liable for infringement, even with the safeguards for tech firms set out in the DMCA, if staff members rather than users upload unlicensed material, and that was the allegation in one of two lawsuits being pursued against the company by Universal Music. And last week a judge ruled in the major’s favour, concluding that the evidence showed Grooveshark employees had indeed be ordered to upload files.

Grooveshark indicated it was considering an appeal as soon as last week’s ruling was announced and, according to The Next Web, it has now seemingly confirmed that an appeal is underway. Meanwhile the digital firm claims that the ruling sets no precedent that hinders its current operations, arguing that the actions at the heart of Universal’s lawsuit relate to a business model that the company parked in 2008.

Whether or not Universal would agree with that, it is true that last week’s ruling does not contradict Grooveshark’s central argument that its core user-upload-based streaming service is protected by the DMCA. The mega-major presumably hopes that, appeals pending, any damages Grooveshark is ordered to pay, in relation to the copyright infringement it instructed its staff to commit, will finish the company off.

Here is the statement in full, as published by The Next Web…

“Grooveshark cannot comment on our current litigation but I can say we are preparing for the appeal process. We can say that we will continue to operate our business ethically and honestly – with first-to-market technology as we have done since 2006. I can also say Grooveshark’s current service has provided millions of dollars in revenue to artists and labels globally.

This decision dealt specifically with an early iteration of Grooveshark which we discontinued in 2008 in favor of our current music streaming service. In turn, we respectfully disagree with the decision, and we are assessing next steps, which will all focus on remaining extremely committed to ensuring we respect artist and songwriter copyrights.

Prior to 2008, the service was a paid music download platform that functioned like a ‘Buy-Sell-Trade’ store, in which users paid for individual tracks. This is very different from the model of our current popular music streaming service, modeled off of YouTube, in which users play songs directly through a browser without the capability of downloads.

We always knew that our service could serve as a powerful tool for labels to build engaged fan evangelism for artists. We prove this daily when we promote and socialise exclusive content to our global audience of nearly 30 million listeners. We want to support musicians just as we do our broadcasters and international partners. Grooveshark was built with the goal of connecting artists and rabid fans.

Our immediate plan of action will be to continue to serve our nearly 30 million listeners with exclusive music, brand promotions, new technology and new device partners – all exclusively for Grooveshark users – which again has been our core edict from day one”.

An email at the centre of Universal’s litigation, sent by Grooveshark co-founder Josh Greenberg to his staff, has been doing to rounds since last week’s ruling. In it he tells his employees to add as many MP3s as possible to their Grooveshark ‘sharing folders’, adding “If I don’t have an email from you in my inbox by Monday [confirming you’ve done this], you’re on my official shit list”. So maybe if the company needs to raise some cash to cover legal fees, it could start selling Post-It notes with the headline ‘Josh’s official shit list’. I’m sure some of those 30 million listeners would buy them.

Talking of which, we’re planning a line of CMU coffee mugs for Christmas. You’ll all buy some of those, right? The Coffee Mug Upsell we’re calling it. And we won’t have to use the profits to pay off Universal for past copyright infringement.



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