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Jury Orders MP3tunes to Pay $41 Million to EMI Following 2013 Court Order Vacating Grant of Summary Judgment

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By Michelle Goldring – Edited by Sheri Pan [caption id="attachment_4300" align="alignleft" width="150"] Photo By: photosteve101 - CC BY 2.0[/caption] Capitol Records, Inc. v. MP3tunes, LLC, No. 07 Civ. 9931 (WHP) (S.D.N.Y. May 14, 2013) Slip Opinion hosted by EMI was awarded $41 million last week following a jury trial that found Michael Robertson, the CEO of MP3tunes, a now defunct cloud music storage service, guilty of copyright infringement. The verdict followed a 2013 order issued by the United States District Court in the Southern District of New York that altered several previous rulings in an earlier order issued by the same court in October 2011. Capitol Records, Inc. v. MP3tunes, LLC, No. 07 Civ. 9931 (S.D.N.Y. Oct. 25, 2011) at *1, Slip Opinion hosted by The court vacated summary judgment rulings on claims by plaintiff Capitol Records, since acquired by EMI, against MP3tunes for contributory infringement liability under the Digital Millennium Copyright Act and red-flag knowledge of infringement Id. at *3–4. The court vacated the 2011 rulings after the Viacom International, Inc. v. YouTube, Inc., 676 F.3d 19 (2d. Cir. 2012) decision by the Second Circuit, which overturned part of an earlier decision central to the 2011 order. The court also denied an inducement cause of action for lack of evidence, as well as a motion for reconsideration on whether MP3Tunes infringed on EMI-owned cover art by displaying it on the service. Capitol Records at *5–6. Ars Technica provides an overview of the order that preceded the damages trial. Reuters provides a brief overview of the order, as well as the history and arguments of the underlying case. Michael Robertson is the founder of MP3tunes, a music cloud storage service that was founded in 2005, according to Reuters. In 2007, EMI sued MP3tunes for copyright infringement of certain songs. Id. This order modifies an order issued in 2011 in this proceeding. In vacating the summary judgment ruling for contributory liability, the court noted that Viacom held that the court could apply the doctrine of willful blindness for DCMA violations. Id. at *2. In this case, the court decided that additional fact-finding would be necessary to determine if MP3tunes had in fact violated the doctrine thereby precluding summary judgment. Id. at *3. Concerning red-flag knowledge, the court found that Viacom lowered the threshold for finding apparent knowledge. Id. at *4. Because “something less than a formal takedown notice” is sufficient, the court vacated its earlier grant of summary judgment. Id. at *6. In denying the motion for reconsideration on the cover art displayed by the MP3tunes app when the service plays a song, the court contrasted use of cover art by MP3tunes to a similar use of thumbnail images in Viacom. Id. at *6. There, the Second Circuit found that thumbnail images on YouTube were permissible under DMCA’s safe harbor protections because they were “closely related to . . . the storage itself.” Id. However, MP3tunes gathered album images from, rather than from user content, and the purpose was not simply to display the images but to market Amazon’s products. Id. Because this constituted more than simple access to “stored material,” the court felt reconsideration was not warranted. Id. at *10. The court also affirmed Robertson’s potential primary and secondary liability for copyright infringement of songs on MP3tunes after takedown notices had been issued. Id.