Tag Archives: UMG

Mayday! Mayday! UMG Took Us Down!!

After UMG won its MSJ (order here), Golden Eagle has apparently settled at a full fare price. According to The Hollywood Reporter, the settlement could be worth $30-40mm to UMG.

UMG’s Motion for Summary Judgment

Umg v Inflight (Umg Msj)

Global Eagle’s Response

UMG v Inflight (Inflight Res to UMG MSJ)

Judge Wu’s Tentative Order

UMG v Inflight (Order Re UMG MSJ)

Judge Wu’s Supplemental Order

UMG v Inflight (Supp Order Re UMG MSJ)

Getting Tufer

TufAmerica has discovered that it can be very expensive to bring a copyright infringement claim when you don’t own the copyright allegedly being infringed. In this case, TufAmerica sued the Beastie Boys (including their record label [UMG] and music publisher [UMPG]) over the alleged sampling of TufAmerica’s recording artist Trouble Funk’s 1982 release “Say What” on the Beastie Boy’s track “Shadrach” from their 1989 release Paul’s Boutique. Judge Nathan of the SDNY recently granted Defendant’s motions for attorneys’ fees and costs totaling nearly $850,000! Judge Nathan had earlier granted Defendant’s motion for summary judgment, finding that TufAmerica lacked standing to sue for infringement because it did not own an exclusive license to the Trouble Funk recording / musical composition at issue. Instead, Judge Nathan found that, at most, TufAmerica had acquired a “bare right to sue,” which is not an exclusive license and does not provide standing under the Copyright Act’s Sec. 501’s standing requirements.

Judge Nathan’s decision is below.

TufAmerica v Beastie Boys (Atty Fee Award)

A Rocky Finish at the 9th Cir. for UMG

Rock River Communications v UMG, No. 12-55180 (9th Cir. 2013)

Rock River’s lawsuit alleged that UMG inappropriately blocked Rock River from distributing its album of Marley remixes by wrongfully threatening to sue Rock River’s distributors. UMG persuaded the district court that unless Rock River had proof that its chain of licensing rights was valid – dating all the way back to the initial musicians and producers – then UMG could not be liable, because there is no liability for interference with an invalid business expectancy.

According to the 9th Circuit, UMG is only half right. Although there can be no liability for interfering with a business expectancy that is invalid or illegal, the defendant (UMG in this case) has the burden to prove the invalidity or illegality of the business expectancy. UMG cannot obtain summary judgment based on the holes in Rock River’s claim to a valid license when the validity of UMG’s own licensing rights is equally spotty.

The facts of the case are pretty straight forward.  In 2006, Rock River entered into a licensing agreement with San Juan Music Group, Ltd. (San Juan),  to “sample” or 16 recordings performed by Bob Marley and the Wailers. San Juan is a music licensing company that, since 1980, has been licensing recordings by Marley through an agreement with Lee Perry, the producer of many of Marley’s early recordings. Rock River eventually produced an album of 12 of these remxies entitled Roots, Rock, Remixed, which it intended to sell through normal sales channels.

In October 2007, however, UMG sent a cease-and-desist letter to Rock River claiming that UMG owned exclusive licensing rights to all the Recordings remixed on the album “Roots, Rock, Remixed” and that Rock River therefore could not release its album without a license from UMG.  UMG sent letters to Apple to block sales of the album on iTunes, to Fontana (a UMG subsidiary) to stop distributing physical units in the US, and to EMI (now a UMG label) to stop international distribution.

Rock River sued UMG in January, 2008, alleging violations of the Sherman Act, 15 U.S.C. § 2, and the Clayton Act, 15 U.S.C. § 18, intentional interference with contract, intentional interference with prospective economic advantage (IIPEA) and misrepresentation in violation of 17 U.S.C. § 512(f). On UMG’s first motion for summary judgment, the district court dismissed all of Rock River’s claims except for its IIPEA claim.

UMG, in moving for summary judgment, argued it cannot be held liable for interfering with an illegal business expectancy, such as album sales of an album that violates copyright law. As the 9th Circuit explained,

“The ingenuity of this theory, although we ultimately reject it, is that it seeks to allow UMG to prevail without requiring UMG to actually establish that Rock River’s album infringed on anyone’s licensing rights. Instead, it casts the licensing rights issue as an essential part of Rock River’s case-in-chief.”

The 9th Circuit reasoned that because San Juan had been openly licensing Marley Recordings for 30 years, including the famous “Trenchtown Rock,” to roughly 40 companies, including to divisions of UMG, without ever being sued, there was at least some evidence that San Juan did have the right to license Rock River.

The 9th Circuit’s opinion is here.

How UMG Got Its Groove[shark] Back…

In another installment of the “We Saw This Coming,” UMG Recordings (“UMG”) has sued Escape Media Group, Inc. (a/k/a “Grooveshark”), along with several of Grooveshark’s executives personally. (UMG Recordings, Inc. v. Escape Media Group, Inc., 11-civ-8407 (Nov. 18, 2011, S.D.N.Y.).

The Grooveshark website is very slick, with an easy to navigate UI.  A search for the artist Jay Z, whose sound recordings are owned and distributed by UMG, results in a list of songs by that artist.  A user can click on any song in the list to start it playing (i.e., on-demand).  Users can create a playlist, “share” the song through Facebook or Twitter, and even buy the song on Amazon or iTunes.  UMG alleges in its complaint that Grooveshark has “no license for the overwhelming majority of the sound recordings available through the Grooveshark website, and [has] no license from UMG for any of its sound recordings.”

More damaging than its general allegations of infringement, UMG alleges that Grooveshark’s executives personally uploaded infringing works and/or directed Grooveshark employees to do the same.  For example, UMG alleges that Samuel Tarantino, Grooveshark’s CEO, personally uploaded 1,791 songs, Paul Geller, SVP, uploaded 3,453 songs, John Ashenden, VP, uploaded 9,195 songs, Chanel Munezero, Software Engineer, uploaded 20,756 songs, and Nikola Arababjiev, Quality Assurance, uploaded 40,243 songs.

UMG attaches several emails to its complaint that it alleges support its case that Grooveshark made the business decision to engage in unauthorized use in an effort to quickly build its following.  For example, Sina Simantob, a principal at Highlander Wealth Services and Chairman of Grooveshark, in an email to Drew Lipsher, a partner at media VC firm Greycroft, stated “we bet the company on the fact that it is easier to ask for forgiveness than it is to ask for permission. … I think [Grooveshark has] a real chance to settle with UMG within a year and by that time [Grooveshark will] be up to 35m uniques and a force to be dealt with.”  In an email to Dr. Jia Gottlieb, who runs the oldest holistic medical clinic in Colorado, Simantob writes “… we are achieving all this growth without paying a dime to any of the labels.”

UMG also attaches what it purports to be a comment left by a Grooveshark employee in response to a story about Grooveshark on the website Digital Music News.  The alleged employee writes

“We are assigned a predetermined about of weekly uploads to the system and get a small extra bonus if we manage to get above that (not easy). The assignments are assumed as direct orders from the top to the bottom, we don’t just volunteer to ‘enhance’ the Grooveshark database.”

Grooveshark’s EULA has some interesting language, especially if UMG’s allegations that Grooveshark executives personally uploaded unlicensed content.  For example, the site’s policy states

Unless we indicate otherwise, you grant EMG and its affiliates a nonexclusive, royalty-free, perpetual, irrevocable, and fully sublicensable right to use, display, perform, reproduce, publish, and distribute such User Content throughout the world via the Service. You grant EMG and it affiliates the right to use the name that you submit in connection with such User Content. You are solely responsible for any necessary payments that may become due to any third parties as the result of your posting of or linking to the User Content and EMG’s use thereof. (emphasis added)

The EULA goes on to define what types of User Content should not be uploaded to the Service

The following is a partial list of the kind of User Content that is illegal or prohibited on the Service. Prohibited User Content includes but is not limited to content that: … (v) consists of an illegal or unauthorized copy of a copyrighted work, such as sound recordings, musical compositions and videos in which you do not personally own the copyright (including CDs and tracks you may have purchased), or otherwise do not have the necessary authority from the copyright owner(s); …. EMG reserves the right to investigate and take appropriate legal action in its sole discretion against anyone who violates this provision, including without limitation, removing the offending User Content from the Service and terminating the membership of such violators.

Its never good when your executives are alleged to be knowingly violating their own terms of service.  Grooveshark settled with EMI and its internal documents indicate it wants to settle with UMG.  However, my guess is UMG is in no mood to reward Grooveshark for its past business decision to launch without a license.  However, as I said, the UI is pretty slick (I personally think its much cleaner and easier to navigate than Spotify) and I can see this site becoming quite popular.  Look for UMG to own most of Grooveshark before this is all over.

The complaint is below:
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