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MP3tunes/EMI copyright ruling paves way for cloud music services

August 23, 2011 — 10:36am ET | By Jason Ankeny

In a ruling with significant ramifications for cloud-based music streaming solutions spearheaded by tech giants like Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Amazon.com (NASDAQ:AMZN), a federal judge has narrowed a music industry lawsuit led by major label EMI Group alleging digital music service MP3tunes enabled users to copy songs without permission.

MP3tunes allows consumers to build music libraries mixing songs purchased online with other tracks offered for free elsewhere across the web. EMI sent the firm several notices to remove links to sites with unauthorized music and filed suit in 2007 after MP3tunes did not delete unauthorized content from users' digital lockers. William H. Pauley III of U.S. District Court in Manhattan ruled Monday that MP3tunes could be held liable for contributory infringement of about 500 tracks that EMI identified as being traded without authorization, but also stated MP3tunes did not did not violate the federal Digital Millennium Copyright Act in permitting downloads, except in the case of songs specifically identified as pirated.

"While a reasonable person might conclude after some investigation that the websites used by MP3tunes executives were not authorized to distribute EMI's copyrighted works, the DMCA does not place the burden of investigation on the Internet service provider," Pauley wrote, effectively stating that consumers--not MP3tunes--are responsible for any copyright infringements.

"This is a huge victory," said Greg Gulia, a partner at Duane Morris, which represents MP3tunes and its CEO Michael Robertson. "Users can still download songs from publicly available websites, and store them without a separate license fee, so long as MP3tunes complies with takedown notices. The main takeaway is that MP3tunes' fundamental business model has been upheld."

Legal analysts say Pauley's ruling essentially sets the stage for Apple, Google and Amazon to continue rolling out cloud music services enabling consumers to access their music libraries from any connected device. However, the ruling does mandate that in order to allow multiple users access to a single online copy of a song, consumers must have the exact same file in their digital library.

Later this year, Apple will introduce its long-awaited iCloud digital media storage platform, which automatically syncs content on Apple servers for access across iOS devices, as well as Macs and PCs. Each day, iCloud backs up all of the user's iOS devices over Wi-Fi, storing content including purchased music, apps and books, as well as photos, videos, device settings and app data. The corresponding iTunes in the Cloud enables consumers to download previously purchased iTunes music to all iOS devices at no additional cost.

The iCloud launch comes on the heels of rival cloud music services introduced earlier this year by Amazon.com and Google. Unlike iCloud, neither effort launched with major label licensing deals in place, meaning consumers must spend hours or even days uploading their digital libraries directly to each company's respective servers. The music industry is counting on iCloud quickly eclipsing Amazon and Google, effectively forcing both to consent to the labels' licensing terms.

For more:
- read this Reuters article