NEW YORK (Reuters)
— The former chief
executive of bankrupt online music storage firm MP3tunes was found
liable Wednesday for infringing copyrights for sound recordings,
compositions and cover art owned by record companies and music
publishers once part of EMI Group Ltd.
A federal jury in Manhattan found Michael Robertson, the
former MP3tunes chief executive, and the defunct San Diego-based
company liable on various claims that they infringed on
copyrights associated with artists including The Beatles,
Coldplay and David Bowie.
The jurors also found MP3tunes was willfully blind to copyright
infringement on its website, in what a lawyer for the recording
companies suggested before the verdict would be the first ruling
by a jury of its kind.
The verdict marked a victory for the music industry in its
long-running legal battle against online content providers,
which it accuses of illegally selling its works without
permission, costing revenue and profit.
Jurors will now decide how much in damages should be awarded
after the verdict and an earlier ruling by the judge finding
them liable on certain copyright claims. The damages phase is
expected to run two to three days.
Both Ira Sacks, a lawyer for Robertson, and Andrew Bart, a
lawyer for the EMI recording labels, declined to comment. Frank
Scibilia, a lawyer for the EMI publishing companies, did not
respond to a request for comment.
Founded in 2005 and once known as a website selling independent
musicians' songs, MP3tunes came to be known for its so-called
cloud music service that allowed users to store music in online
EMI, however, contended in its 2007 lawsuit that the San
Diego-based company's website and a related one called
Sideload.com enabled the infringement of copyrights in sound
recordings, musical compositions and cover art.
More than 2,100 copyrights were at issue in the liability phase
of the trial, Sacks said before the verdict. At trial, Sacks
argued Robertson should not be held liable, and argued that the
record companies themselves made free promotional copies of
their music available online.
The few times users abused the locker system, MP3tunes found out
and shut them down, Sacks told jurors at the trial, which was
before U.S. District Judge William Pauley.
While the jury largely sided with the EMI recording and publishing
companies, it found for Robertson on some claims, including by
deciding not to hold him liable for MP3tunes' failure to remove
files from users' online "lockers" the website provided users to
When initially launched, the lawsuit was closely watched as a
barometer for how courts might view cloud-based music storage
services that came to be offered by companies including Amazon.com
Inc, Apple Inc and Google Inc.
Much has changed with the companies since the lawsuit was filed. EMI
has been split up, its recording music business acquired by Vivendi
SA's Universal Music Group and a consortium led by Sony Corp
acquiring its publishing arm in 2012.
MP3tunes meanwhile filed for bankruptcy in May 2012. The MP3tunes
litigation moved forward as EMI looked to build on recording
industry court victories in cases involving file-sharing services
Napster, Grokster, and LimeWire.
Robertson had in 1997 founded another website, MP3.com, that let
users play music that the company had copied from thousands of CDs
it purchased, so long as users could demonstrate they already owned
That service also prompted litigation, and a federal judge's ruling
against MP3.com in 2000 led to a shutdown of the service and more
than $160 million in estimated payouts by the company to the five
major record labels and music publishers.
MP3.com was a year later sold to Vivendi Universal for about $372
million. The website is today owned by CBS Corp.
The case is Capital Records Inc et al v. MP3tunes LLC et al, U.S.
District Court, Southern District of New York, No. 07-09931.
(Reporting by Nate Raymond in New York; editing by Andrew Hay)