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Court: Grooveshark Not Protected by DMCA Safe Harbor on Pre-1972 Recordings

In a decision handed down yesterday, a five-judge panel from the New York Supreme Court held that the ‘safe harbor’ provisions of the Digital Millenium Copyright Act do not shield Grooveshark from liability with respect to sound recordings created prior to February 15, 1972.

Complete Music Update provides a pretty good summary of the how the case reached this point in the process, so rather than rehash that narrative, I’d like to focus on a few specific passages from the appellate court’s decision.

One of the fundamental disconnects between Grooveshark’s position and that of judicial panel is the question of whether there is any “tension” between the DMCA and section 301(c) of the Copyright Act; Grooveshark maintains that there is no such tension, and the court…. well, the court disagrees, to put it lightly.

“Initially, it is clear to us that the DMCA, if interpreted in the manner favored by defendant, would directly violate section 301(c) of the Copyright Act,” the court wrote in its decision. “Had the DMCA never been enacted, there would be no question that UMG could sue defendant in New York state courts to enforce its copyright in the pre-1972 recordings, as soon as it learned that one of the recordings had been posted on Grooveshark. However, were the DMCA to apply as defendant believes, that right to immediately commence an action would be eliminated. Indeed, the only remedy available to UMG would be service of a takedown notice on defendant. This is, at best, a limitation on UMG’s rights, and an implicit modification of the plain language of section 301(c). The word “limit” in 301(c) is unqualified, so defendant’s argument that the DMCA does not contradict that section because UMG still retains the right to exploit its copyrights, to license them and to create derivative works, is without merit. Any material limitation, especially the elimination of the right to assert a common-law infringement claim, is violative of section 301(c) of the Copyright Act.”

The court also didn’t cotton to Grooveshark’s assertion that if the DMCA is deemed to not apply to pre-1972 recordings that “the very purpose of the DMCA will be thwarted.”

“The statutory language at issue involves two equally clear and compelling Congressional priorities: to promote the existence of intellectual property on the Internet, and to insulate pre-1972 sound recordings from federal regulation,” the court wrote. “As stated above, it is not unreasonable, based on the statutory language and the context in which the DMCA was enacted, to reconcile the two by concluding that Congress intended for the DMCA only to apply to post-1972 works. In any event, defendant’s concerns about interpreting the statutes in the manner advocated by UMG are no more compelling than UMG’s concerns about interpreting the statutes in the manner advanced by defendant. Under such circumstances, it would be far more appropriate for Congress, if necessary, to amend the DMCA to clarify its intent, than for this Court to do so by fiat.”

Grooveshark has said it intends to appeal the decision, and there’s no question that other courts examining the same questions have come to different conclusions (including, notably, the court that heard Capitol Records v. MP3tunes in 2011), but the decision is definitely a setback for Grooveshark, which is reportedly hurting financially, according to its co-founder, Sam Tarantino.