No safe harbor for this shark.
Generally, one doesn’t expect to find copyright decisions of note in state courts, but every so often one will crop up. One really doesn’t expect to find interesting decisions on state-court motions to dismiss a party’s fourteenth affirmative defense… and yet here we are, reading with great interest the April 23, 2013, decision of the New York State Supreme Court, Appellate Division, First Department in UMG Recordings, Inc. v. Escape Media Group, Inc.
Defendant Escape Media Group owns and runs an online music streaming service called Grooveshark, where users can upload audio files, usually songs, to an archive maintained on Escape’s servers; other users can search the servers and stream the files to computers and other devices. The setup is designed to be on the up-and-up, though; it isn’t 1999 Napster. Escape “has taken some measures to ensure that Grooveshark does not trample on the rights of those who own copyrights in the works stored on its servers,” reads the First Department decision. “For example, it is a party to license agreements with several large-scale owners and licensees of sound recordings. In addition, it requires each user, before he or she uploads a work to Grooveshark servers, to confirm ownership of the recording’s copyright or license, or some other authorization to share it.”
Alas! Escape “concedes that it cannot ensure that each work uploaded… is a non-infringing work.” But Escape has operated Grooveshark under the assumption that it is shielded from infringment claims by copyright owners by the “safe harbor” provision of the Digital Millenium Copyright Act, 17 USC § 512. And why not?
Because, counters the plaintiff, which owns the rights to many popular recordings uploaded to Grooveshark, many of which were made prior to the all-important date February 15, 1972: When the Copyright Act was amended in 1971 to include sound recordings, Congress expressly extended federal copyright protection only to recordings fixed on or after that date. So, by permitting recordings fixed earlier to be shared on Grooveshark, Escape infringed on UMG’s common-law copyright rights, and the DMCA—the safe harbor provision of which is raised in the defendant’s fourteenth affirmative defense—provides no shelter.
In the trial court, Judge Kapnick denied UMG’s motion to dismiss Escape’s fourteenth affirmative defense, so UMG appealed that denial, making its argument to a more sympathetic Appellate Division panel. “Initially,” that panel opined, “it is clear to us that the DMCA, if interpreted in the manner favored by [Escape], would directly violate section 301(c) of the Copyright Act.” That is, the section that provides: “With respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this Title until 2067.” (Originally 2047, but extended by Congress in 1998). If the DMCA had never been enacted, UMG would have been able to sue Escape in New York State court to enforce its rights in and to the recordings at issue—as soon as it became aware of the posting of those songs on Grooveshark. If the DMCA applies, however, UMG’s right to immediate action is “eliminated.” “Indeed, the only remedy available to UMG would be service of a takedown notice…. This is, at best, a limitation on UMG’s rights… violative of section 301(c).” And that’s not allowed.