Advanced Copyright Issues on the Internet - Fenwick & West LLP

UMG received no recurring benefit from recipients’ continued possession, and the transfer wasproperly characterized as a gift, both under common law and under the Postal ReorganizationAct. 2059 Augusto brought a counterclaim against UMG under Section 512(f), alleging that UMGknowingly misrepresented to eBay that Augusto’s auction infringed UMG’s copyrights. Thecourt rejected this claim because the evidence demonstrated that UMG had a subjective goodfaith belief that Augusto was infringing its copyrights. UMG was aware that Augusto hadentered into a consent judgment in a previous case, in which he had admitted that sellingpromotional CDs violated the owner’s copyright. August also believed that the license languageon the CDs enabled it to enforce its copyrights against an unauthorized seller of those CDs.Accordingly, the court granted UMG summary judgment on Augusto’s Section 512(f) claim. 2060(viii) Capitol Records v. MP3tunes, LLCIn Capital Records, Inc. v. MP3Tunes, LLC, 2061 a number of record labels broughtclaims for copyright infringement against MP3tunes.com for offering online storage lockerswhere users could store illegally downloaded music and against sideload.com, a search enginethat allowed users to search for free music downloads. The plaintiffs sent MP3tunes a DMCAtake-down notice with a representative list of over 350 songs that were copied, performed,stored, distributed, and made available for download on or by MP3tunes, but also demanded thatMP3tunes take action with respect to all of the plaintiffs’ copyrighted recordings, even if notincluded on the representative list. MP3tunes removed the songs identified on the representativelist from its websites, but took no action concerning the broader demand to take down othercopyrighted recordings. 2062MP3tunes brought a counterclaim under Section 512(f) based on the allegation that fiveor more recordings on the take-down notice were authorized by one of the plaintiff record labels(EMI) for free downloading. The court ruled that MP3tunes was collaterally estopped frombringing the counterclaim based on an earlier ruling in a separate state litigation between theparties. MP3tunes then sought to amend its counterclaim to enumerate additional allegations,including that plaintiff EMI paid third parties to distribute free MP3s over the Internet; at leastsix of the plaintiffs’ record label websites distributed songs for free; and EMI engaged in activemarketing of its music directly and through hundred or thousands of online music partners. Thecourt denied MP3tunes the ability to amend its counterclaim on three grounds. First, the courtnoted, citing the Diebold case above, that a material misrepresentation for purposes of Section512(f) is one that affected the infringer or service provider’s response to a DMCA letter.Because MP3tunes removed only the songs on the representative list and did not respond to thedemand that it remove all links to any of the plaintiffs’ copyrighted recordings, the courtconcluded that the plaintiffs’ representation that any link to its copyrighted recording was2059 Id. at 1060-61.2060 Id. at 1065.2061 611 F. Supp. 2d 342 (S.D.N.Y. 2009).2062 Id. at 344.- 446 -