Court Rules For Music Companies In MP3tunes Copyright Case

(Reuters) -- A U.S. appeals court ruled on Tuesday that record companies and music publishers that once formed part of EMI Group Ltd could pursue additional copyright infringement claims in a long-running lawsuit over defunct online music storage firm MP3tunes.

The 2nd U.S. Circuit Court of Appeals in New York also rejected an appeal by MP3tunes founder Michael Robertson, and reinstated much of a jury 2014's verdict awarding the music companies $48 million that a trial judge later reduced.

The ruling marked the latest turn in protracted court battles between the music industry and online content providers. They followed prior copyright litigation that led to the shutdown of another company Robertson founded, MP3.com.

Founded in 2005, San Diego-based MP3tunes came to be known for its so-called cloud music service that allowed users to store music in online lockers.

In a lawsuit filed in 2007, EMI Group Ltd contended the MP3tunes website and a related one called Sideload.com enabled the infringement of copyrights for sound recordings, musical compositions and cover art.

EMI was split up after the lawsuit's filing, with Vivendi SA's Universal Music Group buying its recording music business and a consortium led by Sony Corp acquiring its publishing arm.

A federal jury in Manhattan in 2014 awarded the EMI companies nearly $48.1 million, a sum U.S. District Judge William Pauley in Manhattan later reduced, resulting in a $12.2 million judgment against Robertson.

On appeal, the music companies argued Pauley wrongly concluded pretrial that MP3tunes was eligible for safe harbor protection under the Digital Millennium Copyright Act by implementing a policy for terminating repeat infringers.

In Tuesday's ruling, a three-judge appellate panel rejected Pauley's narrow definition of "repeat infringer" as only covering users who upload infringing content, rather than ones who downloaded songs for personal entertainment.

"In the context of this case, all it takes to be a 'repeat infringer' is to repeatedly upload or download copyrighted material for personal use," U.S. Circuit Judge Raymond Lohier wrote.

The court also reinstated part of the verdict Pauley had thrown out, though left alone his decision to reduce $7.5 million in punitive damages to $750,000.

"We are gratified the court reinstated the jury’s verdict finding the defendants were willfully blind to the rampant infringement on their website," said Andrew Bart, a lawyer for the recording labels.

The court also rejected Robertson's own appeal. Ira Sacks, his lawyer, said he may further appeal.

The case is EMI Christian Music Group, Inc et al. v. MP3tunes, LLC et al, 2nd U.S. Circuit Court of Appeals, No. 14‐4369.