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Grooveshark responds to Universal lawsuit

By | Published on Wednesday 23 November 2011

Grooveshark

A legal rep for Grooveshark has responded to Universal’s latest lawsuit against the streaming music firm, accusing the major of “gross mischaracterisation”.

As previously reported, although Grooveshark has licences from EMI and some indies in place, because it allows users to upload content to its libraries the service offers music from many other labels too. Execs at the streaming platform claim that they operate a takedown system, removing unlicensed content if and when made aware of it, and therefore are protected from liability for copyright infringement under the US Digital Millennium Copyright Act.

Given the ambiguities that exist around websites having protection from liability claims under the DMCA (key court cases haven’t tended to put many obligations on website owners regarding the efficiency of their takedown systems), Universal has been looking for ways to sue Grooveshark where the DMCA defence wouldn’t apply.

Last week it filed a new lawsuit claiming that it had evidence staff at Grooveshark, including senior execs, had themselves uploaded unlicensed music to the Grooveshark platform, a more straight case of copyright infringement outside the remit of the DMCA. Their evidence came from upload data provided by Grooveshark to Universal as part of an early legal squabble.

The major also cited a recent anonymous comment posted to the Digital Music News website which claimed to come from a Grooveshark insider, and which alleged that staff at the digital company were routinely ordered to upload unlicensed content to the website.

But Grooveshark attorney Marshall Custer yesterday said that the Digital Music News post was “blatantly false” and that Universal’s interpretation of their upload data was a “gross mischaracterisation of information”.

Custer’s full statement reads: “We have reviewed the complaint that Universal Music Group filed last Friday against Grooveshark in the US District Court in Manhattan. Universal’s claims rest almost entirely on an anonymous, blatantly false internet blog comment and Universal’s gross mischaracterisation of information that Grooveshark itself provided to Universal. While Universal has deliberately engaged the media prior to serving a copy of the complaint on Grooveshark, Grooveshark intends to fight this battle before the Court, not in the press. Grooveshark welcomes the opportunity to present the facts to the Court and has full confidence that it will prevail in the litigation”.

There has been an increasingly vocal backlash against Grooveshark in the last year, as it continues to grow, as big brands advertise on its platform, and as competing streaming services around the world have limited their freemium options, giving the Groovesharkers a competitive advantage, albeit one based on large quantities of unlicensed catalogue.

That backlash has been particularly strong of late in the alternative and grass root artist community, as well as among label execs, which, of course, is always harder to counter in PR terms. And is arguably all the more problematic for Grooveshark given founder Sam Tarantino told Bloomberg earlier this year that he saw his company long term as an artist services business and quasi management agency come label, rather than just a digital content set up funded by advertising and subscription revenues.

Another interesting dimension of the developing squabble with Universal, of course, is that Grooveshark’s biggest licensing deal to date was with EMI – the result of an out of court settlement after that major also sued – but it’s not clear what will happen to that arrangement if and when Universal secures ownership of the EMI recordings catalogue. Even if Universal can’t bail on that agreement immediately, it seems certain the major wouldn’t renew when the existing licence expires. Leaving Grooveshark with only deals in place with some smaller independents.

Of course Universal and Grooveshark could kiss and make up, as EMI and Grooveshark did in 2009, but given the mood at the music company on this just now, and Custer’s tone in his response, it seems both sides are currently more than willing to take this one to court.



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