Monthly Archives: January 2012

Mega Uploaded! Feds Shutter Site and Arrest Dot Com!

Regular readers will recall my recent post about Megaupload Ltd. v. Universal Music Group, Inc., 11-cv-6216-CW (N.D. Cal. Dec. 16, 2011), in which the alleged piratical website operator Megaupload moved ex parte for a temporary restraining order against record label UMG for “sabotaging [Megaupload’s promotional video] campaign through abuse of the notice and takedown procedures of the” DMCA.

Apparently, the Depart. of Justice has already made up its mind about Megaupload, filing a five-count indictment–including allegations of copyright infringement, conspiracy to commit money laundering and racketeering–and having four employees arrested in New Zealand, including Kim Dotcom, Megaupload’s outspoken leader.  Although Megaupload is headquartered in Hong Kong, some of the alleged pirated content was hosted on leased servers in Ashburn, Va., which the Feds used to claim jurisdiction in the Eastern District of VA.  The website, which claimed to have 50 million daily users and ranked in the top 20 most visited websites, was shuttered as well.  Visitors to the site were greeted with the following:

The Indictment is here
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Did You Ever Wonder How BMI Calculates Your Royalties?

An interesting battle is raging in the Central District of California, pitting Broadcast Music Inc. (“BMI”) against one of its own publishers, Deyon Davis (through his publishing company Cinematic Tunes, Inc. (“CTI”)).  The dispute is over royalties BMI paid to Davis for performances of his works on two seasons of the reality show So You Think You Can Dance and one season of the reality show Superstars of Dance.  BMI claims that the cue-sheets on which it relied in making payments to Davis were falsified, at the request of Davis, resulting in over-payments of $1.5 million—nearly $725,00 paid to him individually, nearly $530,000 paid to Deyon Davis Music, and more than $270,000 paid to CTI.  Davis claims that he had nothing to do with the allegedly falsified cue-sheets and that “BMI unlawfully assumed the role of ‘judge and executioner’ with respect to the parties’ dispute, purporting to adjudicate the dispute in its favor and then engaged in self-help by seizing Counterclaimants’ subsequently earned royalties to satisfy its ‘judgment.'”

The war of words is fierce.  In his counterclaim, Davis calls BMI “a bully. BMI deceptively lures unsuspecting songwriters and publishers into its playground (BMI ‘s performing rights licensing and royalty system) with the promise of fun (the fair calculation and payment of royalties) and then spends the day bossing them around, beating them up and taking their toys.”

In its Motion to Dismiss Davis’ Counterclaims, BMI notes Davis’ “fraud-based criminal
convictions” and describes Davis’ actions as “intentionally undertaking to deceive a not-for-profit-making music licensing company into paying you considerably more than your share of royalties to the direct detriment of your fellow songwriters, composers, and music publishers, and then refusing to return any of those royalties when you get caught…”, which BMI characterizes as “dishonest.”

Interestingly, the publisher agreement on which BMI bases it’s breach of contract claim contains a broad mandatory arbitration provision, including exclusive jurisdiction in New York. (see attached).  It’s not clear why BMI choose to file suit in the Central District of California, except that some of the parties in the case were not BMI-affiliated writers or publishers.  I think I would have filed a motion to compel arbitration.

Davis’ Counterclaims
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BMI’s Motion to Dismiss
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BMI’s Publisher Agreement with Davis
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